The Chinese authorities are urging some state-owned companies to abandon the services of the “big four” audit firms – Deloitte, KPMG, EY and PwC – and instead audit their Chinese competitors. Writes about it Bloomberg citing sources familiar with the situation. As they note, China does not want to give Western companies access to confidential data of local corporations, guided by national security considerations.
According to Bloomberg, in particular, the Ministry of Finance of China sends recommendations to some state-owned companies after the expiration of existing contracts to refuse to work with the Big Four and move on to local companies. At the same time, their foreign affiliates will still be able to use the services of the Big Four. Bloomberg estimates that these audit firms generated nearly $3 billion in revenue from Chinese clients in 2021. As Richard Harris, CEO of Hong Kong-based investment advisory firm Port Shelter Investment Management, said, the switch to lesser-known local auditors could make it harder for Chinese state-owned firms to access overseas investment. .
The Chinese authorities and representatives of the Big Four companies did not comment on this information.
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