Keep up with the news by installing RT’s extension for . Never miss a story with this clean and simple app that delivers the latest headlines to you.

 

World's top auditors under fire in US fraud probe

Published time: December 04, 2012 09:56
Edited time: December 04, 2012 13:56
Ernst & Young

Ernst & Young

US regulators have charged China-based affiliates of the ‘Big Four’ audit firms, Deloitte, Ernst & Young, KPMG and PwC, with security law violations, saying they refused to cooperate with investigators in a fraud probe.

­The US Securities and Exchange Commission claims that the four firms as well as another account firm BDO China Dahua have refused to provide Chinese audit papers to investigators that are probing nine companies publicly traded in the US over fraud. There has been a two year investigation of Chinese based companies listed in the US suspected of failing to provide accurate financial reports to investors.

“Only with access to work papers of foreign public accounting firms can the SEC test the quality of the underlying audits and protect investors from the dangers of accounting fraud,” SEC Enforcement Director Robert Khuzami said in a statement. “Firms that conduct audits knowing they cannot comply with laws requiring access to these work papers face serious sanctions.”

US accounting regulator the Public Company Accounting Oversight Board (PCAOB) has agreed with most major economies aside from China on getting access to foreign auditors of US-listed companies. PCAOB has discussed the issue with Chinese regulators in Washington in the last week of November, but no agreement has been reached.

It’s not the first time the ‘Big Four’ auditors have come under fire over withdrawing papers from financial regulators. Ernst & Young will have to pay a $117 million fine to settle a probe in Canada against Chinese firm Sino-Forest for alleged manipulation of financial information.

Comments

Add comment

Authorization required for adding comments

Register or

Name

Password

Show password

Register

or Register

Request a new password

Send

or Register

To complete a registration check
your Email:

OK

or Register

A password has been sent to your email address

Edit profile

X

Name

New password

Retype new password

Current password

Save

Cancel

Follow us