Chinese regulators impose six-month ban, $62M fine on PwC’s China unit

Chinese authorities banned PwC’s Chinese unit from performing audits in the country for six months, labeling the subsidiary’s flawed audit work as complicit in the failure of giant property developer Evergrande. The move continues a pattern of increased scrutiny of Western firms’ audit work in China, both by regulators in China and the U.S.

The punishment against PwC Zhong Tian also included a record fine totaling 441 million yuan ($62 million), published Friday by China’s Ministry of Finance and the China Securities Regulatory Commission (CSRC). The penalties were imposed for the flawed audits of Hengda Real Estate, a subsidiary of failed property developer China Evergrande Group, the regulators alleged.

Following an investigation, the CSRC concluded the firm “turned a blind eye” or “even condoned” Evergrande’s fraud while conducting audits of Hengda in 2019 and 2020.