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