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US Inspections of China Audits Could Take Months, Says PwC

US auditors continue to inspect the books of top Chinese companies listed in the US. PwC chairman Bob Moritz said: “We will continue to share the information that is allowable.”


Alibaba Group will be among the first batch of US-listed Chinese companies that undergo an audit by US regulators in September, sources say.
The Alibaba Group logo is seen on the trading floor at the New York Stock Exchange in Manhattan, August 3, 2021. File photo: Andrew Kelly, Reuters.

 

U.S. regulatory inspections of Chinese companies audits have started but it may take months before conclusions are shared, accountancy giant PwC says.

“We are in the very early stages,” PwC Global chairman Bob Moritz said. “We’ve got a number of months to go yet before the conclusions are reached.”

A China-US agreement in August allows American regulators, for the first time, to inspect China-based accounting firms that audit New York-listed companies to help resolve a dispute that threatened to boot more than 200 Chinese companies from US exchanges.

The two nations recently agreed that Beijing would also send regulatory officials to Hong Kong to help US accountants with the inspections.

E-commerce giants Alibaba Group, a customer of PwC, and JD.com are among the first firms selected for scrutiny.

As inspections are carried out, we will continue to share the information that is allowable, Moritz added.

 

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Record Revenue for PwC

Meanwhile, Moritz confirmed record global revenues for PwC of $50.3 billion for the year ended June 30, up 13% on the prior period.

During its last fiscal year, the “Big Four” auditor pulled out of Russia following the its army invaded Ukraine on February 24, while its global headcount rose by more than 32,000 to 328,000, as a four-year, $12-billion programme to hire 100,000 people kicked off.

Moritz expects “significant” hiring in the current fiscal year to continue as business rebounds from the Covid pandemic.

PwC has yet to set out any mandatory minimum number of days for working in the office, though hybrid working was here to stay, he said.

“What we are expecting is that when they do come in, there is a purpose for coming in. It’s making sure the other people are there as well,” Moritz said.

Rival EY – formerly Ernst & Young – is asking partners if they back splitting audit and consulting into two companies.

“We have been very clear that our current construct and organisational model is appropriate for the stakeholders we serve … and we do not see any need for change,” Moritz said.

 

  • Reuters, with additional editing from Alfie Habershon

 

 

Read more:

 

China Sends Regulators to Hong Kong to Help US Audits

Alibaba, JD.com Among First Chinese Firms Facing US Audits

 

 

Alfie Habershon

Alfie is a Reporter at Asia Financial. He previously lived in Mumbai reporting on India's economy and healthcare for data journalism initiative IndiaSpend, as well as having worked for London based Tortoise Media.

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