Accounting firms’ China units agree to pay US$2m
Print Edition
THE Chinese affiliates of the “Big Four” global accounting firms have agreed to pay a combined US$2 million to settle a long-running dispute with the United States Securities and Exchange Commission over their reluctance to turn over documents related to investigations of potential fraud, the SEC said on Friday.
The China-based units of PricewaterhouseCoopers, Deloitte Touche Tohmatsu, KPMG and Ernst & Young each agreed to pay US$500,000 and take steps to provide documents to SEC investigators over the next four years, the SEC said.
The deal follows a ruling by the SEC last year that recommended the suspension of the four firms for six months, which could have affected hundreds of Chinese companies listed in the US and US multinational companies operating in China.
“The settlement provides a path forward for obtaining productions and enhanced future cooperation from the Big Four firms,” said Antonia Chion, associate director of the SEC’s Enforcement Division.
As part of the settlement, the Chinese affiliates admitted that they did not produce documents before the SEC started administrative proceedings against them in 2012, the SEC said.
The companies said in a joint statement that they were pleased to have reached a settlement.
“The firms’ ability to continue to serve all their respective clients is not affected by this settlement,” the statement said.
The dispute began in 2012 after the SEC filed lawsuits against the affiliates for their refusal to provide audit work documents related to China-based companies under investigation for potential accountancy fraud.
The firms said providing such access would violate Chinese law.
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