Background
Following an independent review, Hong Kong’s audit regulator has cleared PwC of allegations related to its audit work for Chinese property developer China Evergrande Group. The allegations had been made by a former employee of the firm.
Investigation Findings
The Financial Reporting Council (FRC) of Hong Kong conducted a thorough investigation into the matter, including reviewing PwC’s audit files, interviewing the firm’s personnel, and considering the allegations made by the former employee.
The investigation found no evidence to support the allegations that PwC had failed to meet its professional responsibilities or had breached any applicable laws or regulations. The FRC concluded that PwC’s audit work for China Evergrande Group was conducted in accordance with the applicable auditing standards.
FRC’s Statement
In a letter to PwC, the FRC stated:
We have reviewed the allegations made by [the former employee]and have found no evidence to support these allegations. We are satisfied that PwC conducted its audit work for China Evergrande Group in accordance with the applicable auditing standards and that it met its professional responsibilities.
PwC’s Response
PwC welcomed the FRC’s findings and emphasized its commitment to maintaining the highest ethical standards.
We are pleased that the FRC has cleared us of these allegations, said a PwC spokesperson. We take our professional responsibilities very seriously and are committed to providing high-quality audit services to our clients.
Implications
The FRC’s findings are a significant development in the ongoing saga surrounding China Evergrande Group. The allegations against PwC had raised concerns about the integrity of the firm’s audits and the financial reporting of Chinese companies. The FRC’s clearance of PwC provides a degree of assurance that PwC’s work for China Evergrande Group was conducted properly and that the financial statements of the company were accurate.
Moving Forward
The FRC’s findings will likely have a positive impact on PwC’s reputation and its ability to continue providing audit services to Chinese companies. The firm has stated that it will continue to cooperate with the FRC and other regulators to ensure that its audit work meets the highest standards.
Kind regards G. Porter.
