China and the world’s largest audit firms face credibility risks under an order Beijing issued saying the firms must hire more Chinese citizens to manage operations there, analysts said.
Thursday’s order follows a string of accounting scandals at Chinese companies listed on U.S. stock markets and amid broader questions about China’s willingness and ability to conform with international business standards and rules.
As the world’s second largest economy, China has enterprises with global ambitions, but markets often question the accountability and transparency of these businesses. The new government order will do little to alleviate that scepticism.
China’s Ministry of Finance announced the audit industry’s so-called Big Four – PricewaterhouseCoopers, Ernst & Young, KPMG and Deloitte – must begin to hand over the reins of their Chinese practices to its citizens and accountants.
PricewaterhouseCoopers said it supports the programs and has been “localising its China practice.” Ernst & Young…
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