Fri Sep 13 09:16:00 UTC 2024: ## PwC Banned in China for Six Months, Fined £42.9 Million over Evergrande Audit
**BEIJING -** Chinese authorities have imposed a six-month ban and a hefty fine of over £42.9 million on accounting firm PwC for its role in the audit of collapsed property developer Evergrande. This marks the most severe punishment yet for an international accounting firm operating in China.
The Ministry of Finance and the China Securities Regulatory Commission (CSRC) levied a combined £42.9 million in fines and penalties on PwC, alleging the firm failed to perform due diligence in its audits of Evergrande. PwC will be barred from signing off on any financial results in China for six months, effectively suspending its operations.
PwC’s global chair, Mohamed Kande, admitted the firm’s audit work fell “below our high expectations” and was “completely unacceptable.” The statement acknowledged that the firm has been cooperating fully with regulators and will comply with the penalties. To address the issue, PwC China has fired six partners and five staff directly involved in the Evergrande audit, and is also penalizing former and current firm leaders responsible for the business.
The punishment stems from Evergrande’s collapse in January, exposing the developer’s massive debts and highlighting a wider property crisis in China. Chinese regulators had previously accused Evergrande of inflating its revenues by nearly £61 billion in 2019 and 2020.
PwC’s relationship with Evergrande spanned 14 years, during which the firm issued clean bills of health for the developer’s accounts. The incident raises concerns about the effectiveness of accounting oversight in China, especially as PwC is the largest of the “big four” accounting firms operating in the country.
This action is part of China’s ongoing crackdown on excessive borrowing by developers, which has impacted several sectors of the economy.
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