China-based PwC affiliates fined $7M in historic PCAOB actions

The Public Company Accounting Oversight Board (PCAOB) imposed $7 million in total penalties against two affiliates within PwC’s global network under its first enforcement settlements with mainland Chinese and Hong Kong firms since the passage of the Holding Foreign Companies Accountable Act.

PwC Hong Kong was fined $4 million and PwC China $3 million for failing to detect or prevent employee cheating on mandatory internal training exams, the PCAOB announced Thursday. The penalty against PwC Hong Kong is the largest the regulator has imposed against a China-based firm and the second largest in its history. The $3 million fine matches the third largest.

The PCAOB also fined China-based Shandong Haoxin Certified Public Accountants Co. and four of its associated persons a total of $940,000 for alleged violations of U.S. securities laws and PCAOB rules and standards.