China’s Finance Ministry has suspended Deloitte’s Beijing office for three months over “serious audit deficiencies” in the firm’s work with a big state-owned asset manager. The
accounting firm was also fined about $31M. The suspension comes after
an investigation into Deloitte’s audits of China Huarong Asset
Management.
- China Huarong received a
$6.5B bailout from state-owned financial institutions in late 2021 after
suffering considerable losses in 2020.
- China’s Finance
Ministry said Deloitte did not assess the true value of China Huarong’s
assets or provide proper audit opinions on unusual transactions even
after identifying them.
- Deloitte said it cooperated fully with
the ministry’s inspection and regretted its work fell below the required
auditing standards.
- China Huarong is one of the largest state-owned bad-debt managers.
