PricewaterhouseCoopers (PwC), one of the biggest auditors in the world, has lost more than a dozen of its Chinese clients in the last two years. In May 2024, the company lost five of its major clients: China Taiping Insurance Holdings, China Merchants Bank, People’s Insurance Company of China, China Railway Group, and China Electronics Huada Technology. In the latest development, Reuters reported that the firm lost another major client, the Bank of China, to its rival Ernst & Young (EY). This news broke out when the firm was already facing regulatory investigations for auditing practices for troubled property developer China Evergrande Group.
Also read, Global Stock Markets Falls With the Repercussions Of Evergrande ‘Collapse’
This is one of the biggest setbacks for the auditor, as the Bank of China contributes to the majority of the company’s revenue. According to the company’s filings, the Bank of China paid 193 million yuan ($27 million) in auditing fees last year. The bank was planning to rehire PwC as its auditor for this fiscal year; however, it dropped the plan and hired its rival, EY.
According to Reuters, “At least 50 Chinese firms, many of which are state-owned enterprises or financial institutions, have either dropped PwC as their auditor or cancelled plans to hire the firm in recent months.”
PwC, a leading auditing firm in China, was the auditor of the China Evergrande Group for 14 years, and it is now being investigated for committing a multi-billion dollar scandal. In the previous year, Evergrande was accused of committing a $78 billion fraud, which, if found true, will attract heavy penalties and further tarnish the credibility of PwC.
