After fining Deloitte £25m, China vows to discipline the Big Four
China has vowed to toughen its stance towards the Big Four accounting firms after hitting Deloitte with a £25m fine for auditing failures.
After meeting with Deloitte’s global chair Sharon Thorne, China’s Ministry of Finance (MoF) outlined plans yesterday to “strengthen” its supervision of the country’s audit sector by “strictly” enforcing “financial discipline.”
China’s vice finance minister Zhu Zhongming met with Thorne after the MoF fined the firm £25m for “serious deficiencies” in its audits of state-owned asset manager China Huarong.
In a statement published after the meeting, Zhu said he hoped Deloitte “would correctly understand the problem, accept the punishment, learn lessons deeply… and effectively improve the audit quality.”
Deloitte said, according to the statement, that it “fully” accepts the MoF’s penalty and vowed to “implement a rectification plan to promote the improvement of audit quality,” while supporting the “high-quality development of China’s economy”.
Deloitte didn’t immediately respond to a request for comment.
The statement is yet another signal that China is adopting a more stringent approach towards international auditors.
Just last month, the MoF called on the China’s state-owned companies to start using local Chinese or Hong Kong auditors after their audit contracts with any of the Big Four firms expire.
The MoF’s statements also come as Chinese president Xi Jingping pushes ahead with plans to strengthen regulation of China’s financial system, which has seen the government create an entirely new watchdog to oversee the country’s finance industry.