Finshots Daily
The Big 4 problem in China
Jul 15, 2024
Exploring China's scrutiny of auditing giants like PwC due to financial irregularities, focusing on the impact on the economy and auditing firms' credibility.
07:25
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Quick takeaways
- Chinese government intensifying audits on major auditing firms like Deloitte, PwC, EY, and KPMG due to concerns about their quality of work.
- Auditor neglect in uncovering Evergrande's accounting irregularities tarnished trust in the auditing industry in China.
Deep dives
China audits Big 4 auditing giants
The Chinese government is intensifying audits on major auditing firms like Deloitte, PwC, EY, and KPMG due to concerns about their quality of work. There is skepticism regarding the firms' dedication to uncovering potential financial inaccuracies in audited companies, prompting rigorous questioning and document requests. This scrutiny aims to prevent crises like the Evergrande collapse, where unsustainable debt accumulation and accounting malpractices led to Evergrande defaulting on a $300 billion debt in 2021.
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