22 February 2019

US judge backs SEC suspension for Chinese audit firms, WSJ says

The Chinese units of the top four global accounting firms — PricewaterhouseCoopers, Deloitte Touche Tohmatsu, KPMG and Ernst & Young – should be suspended from auditing US-traded companies for six months, a US Securities and Exchange Commission administrative law judge ruled Wednesday, the Wall Street Journal reported. The audit firms, plus a fifth China-based accounting firm, broke US law when they refused to turn over documents about some of their clients to the SEC, to aid the commission in investigating those companies for possible fraud, Judge Cameron Elliot is said to have ruled. The ruling doesn’t take effect immediately, and the firms might appeal, first to the commission itself, then to the federal courts, the Journal said. But if the ruling stands, it could leave more than 100 Chinese companies that trade on US markets temporarily without an auditor, the paper said.

– Contact HKEJ at [email protected]



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