Chinese authorities have asked state-owned firms to allow their contracts with the Big Four accounting firms to expire.
According to sources, Beijing has been looking to limit the influence of the U.S.-linked global auditing firms on Chinese businesses and secure the country’s financial data. China also aims to bolster its local accounting industry.
- Chinese state-owned entities are urged to use local Chinese or Hong Kong accountants when their contracts with the Big Four firms expire.
- Offshore subsidiaries can still use U.S. auditors.
- The move comes after Beijing reached a landmark deal with the U.S. last year to allow U.S. audit inspections on hundreds of Chinese firms listed in New York.
- No deadline has been set for Chinese firms to make the change.
- The Big Four accounting firms are PWC, Ernst & Young, KPMG, and Deloitte.
- According to China’s finance ministry, the Big Four firms earned a combined revenue of 20.6B yuan ($3B) from all Chinese clients in 2021.
