China Merchants Port Group, a Shenzhen-listed conglomerate, has decided to terminate its contract with auditing firm PricewaterhouseCoopers (PwC), joining several other large corporations amid concerns related to insolvent property developer China Evergrande.
The recent move by China Merchants Bank, China Railway Group, Mindray Bio-Medical Electronics, and Eastroc Super Drink to cancel contracts with PwC aligns with a trend of companies distancing themselves from the auditing firm due to potential malpractice.
PwC has faced scrutiny following allegations of turning a blind eye to the misconduct of China Evergrande. The US firm denied the accusations, but regulators in China and Hong Kong are investigating its practices. As a result, companies like China Merchants Bank and China Railway Group have switched to other auditing firms such as EY and Deloitte.
This shake-up in the auditing industry reflects a broader trend in China, where government entities have urged state-owned firms to reconsider their partnerships with major auditing firms like PwC, Deloitte, EY, and KPMG.
PwC’s troubles extend beyond China, with scandals in Australia and fines in mainland China and Hong Kong. The company’s reputation is under scrutiny as it navigates various challenges in different markets.
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