China-US Economic Ties

China Asks State Firms to Drop Big Four Auditors Over Data Fears

 

Chinese authorities have urged state-owned firms to stop using the four biggest global accounting firms over concerns about data security, media reports said on Wednesday.

China’s Ministry of Finance is among government entities that gave informal guidance to some state-owned enterprises as recently as last month, urging them to let contracts with PwC, EY, KPMG and Deloitte expire, reports said, citing people familiar with the matter.

Beijing is looking to rein in the influence of Western audit firms as it looks to cap cross-border data flows.

 

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While offshore subsidiaries are allowed to use the global auditors, their parent firms were urged to hire local Chinese or Hong Kong accountants when contracts come up, reports said.

Data policy has become one of several areas that China has tightened its grip over. Beijing aims to ensure corporate practices don’t pose threat to the country’s national and economic interests.

China implemented a Data Security Law in September 2021 which broadly requires Chinese companies and localities to categorize data based on its relevance to national security and the economy.

The Ministry of Finance and the Big Four firms did not immediately respond to Reuters’ requests for comment.

The leading accounting firms in the world by revenue are Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and Klynveld Peat Marwick Goerdeler (KPMG).

 

  • Reuters, with additional editing by Vishakha Saxena

 

 

Also read:

 

China’s Offshore Listing Rules Spur Fear on Approval Process

 

Securities Watchdog Set to Vet All Chinese Offshore Listings

 

China Planning Ten-Fold Increase in Some Cyber Law Fines

 

China Cybersecurity Rules Seen as Big Risk For Finance Firms

 

ASML Accuses China Employee of Chip Tech Theft – FT

 

 

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at vishakha.saxena@asiafinancial.com

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