Connect with us

Hi, what are you looking for?

US-China

US Regulator Imposes $7 Million Fine on PwC China for Exam Cheating

The China division of the renowned “Big Four” firm PwC is facing a substantial $7 million fine from the US Public Company Accounting Oversight Board (PCAOB). The regulator disclosed that PwC failed to prevent extensive cheating during internal training exams in mainland China and Hong Kong, marking one of the largest fines ever imposed by the PCAOB.

 

Widespread Violation of Standards

The PCAOB revealed that the cheating, involving unauthorized software applications, was widespread and included hundreds of PwC China employees, along with over 1,000 PwC Hong Kong employees. This breach of quality control standards was particularly concerning as many of the involved employees later worked in the assurance practices of the firms, advising clients on corporate disclosures.

Historic Fines and Regulatory Actions

These penalties, totaling $7 million, are groundbreaking as they are the first imposed by the PCAOB against Chinese companies since a 2022 agreement allowed US regulators to inspect and investigate firms based in mainland China and Hong Kong auditing Chinese companies on Wall Street. The $4 million fine for PwC China is the second-highest penalty in PCAOB history, with the $3 million fine for PwC Hong Kong matching the third-highest amount.

No Tolerance for Irresponsibility

PCAOB Chair Erica Y. Williams emphasized the end of Chinese companies evading responsibility, asserting that the PCAOB will take robust action to protect US investors and enforce severe sanctions against rule violators, regardless of their location.

PwC’s Response and Remedial Measures

PwC’s mainland China and Hong Kong offices promptly investigated the matter and took remedial action, directing retakes of relevant courses and prohibiting further use or distribution of the involved technologies. Both firms claimed to have collaborated with US officials and self-reported the issue to the PCAOB, expressing commitment to learning from the incident and striving for better standards in the future.

Additional Fine for Fraudulent Audit Report

In a related development, the PCAOB fined Shandong Haoxin, a mainland Chinese accounting company, for submitting a fraudulent audit report. Shandong Haoxin and four associates received a total fine of $940,000 and are temporarily prohibited from working together at a registered public accounting firm.

The significance of these fines extends beyond monetary penalties, signaling a commitment to uphold auditing standards and ensuring accountability in international financial practices.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Evergreen

Milwaukee, WI – A recent report on crime rates in Milwaukee has identified the 15 most dangerous neighborhoods, shedding light on areas grappling with...

Finance

Governor Glenn Youngkin of Virginia announces the rollout  of Virginia $400 tax rebate checks this week, alongside the launch of an online tool to...

Evergreen

Violent and property crime on the rise, urging residents to stay vigilant and take precautions.   In a recent study analyzing crime rates across...

Finance

The Oregon Treasury’s recent announcement about its “Checks Without Claims” program is bringing excitement as $10 million in unclaimed property is set to be...