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China’s Ministry of Finance accuses Deloitte Beijing of serious audit deficiencies and fines it 30 million yuan

Deloitte, one of the world’s four largest accounting firmsBeijingThe branch office was suspended by China for three months and fined about 212 million yuan (about US$30.78 million).ChinaMinistry of FinanceAccording to the statement, after multiple on-site inspections, personnel interviews and hearings, it was found that Deloitte’s investigation of China’s Huahua Group between 2014 and 2019financingAsset Management Co., Ltd.’s audit work contained “serious audit deficiencies”.

The Ministry of Finance of the People’s Republic of China issued a notice on administrative punishment on the 17th, stating that starting from 2021, the quality of accounting information of China Huarong Asset Management Co., Ltd., hereinafter referred to as “Deloitte” referenced) drives quality. Inspection

The notice said that after the investigation, Huarong had problems such as internal control and risk control failure to varying degrees from 2014 to 2019, and serious distortion of accounting information. Deloitte did not pay enough attention to the essence of many of Huarong’s economic businesses, did not enter into an audit of the actual condition of the underlying assets, ignored the approval compliance of major investment cases, and did not properly issue audit opinions on identified unusual transactions , and failed to objectively assess the state of corporate assets. failure to correctly assess the reasonableness of expected credit loss model parameters, failure to maintain professional skepticism during the provision of audit services, failure to effectively apply required audit procedures, failure to obtain sufficient and appropriate audit evidence, and Serious audit deficiencies.

The Chinese Ministry of Finance said that in accordance with China’s “Accounting Law”, “Certified Accountants Law” and other laws and regulations, it made an administrative penalty decision on March 15 in accordance with the law. For Deloitte: Alert Deloitte Head Office; suspend the business operations of the Deloitte Beijing Branch for three months; Deloitte Beijing branch confiscate illegal proceeds and fine a total of 211.9044 million RMB, and Deloitte Head Office shall bear joint and multiple liabilities.

In addition, Jing Moumou, a certified public accountant who signed the relevant audit report of Deloitte, was given the administrative penalty of revoking the certificate of a certified public accountant; Three responsible persons of a certain class were given administrative punishment of suspending their business. for six months, and the six responsible persons, including Zong, were given an administrative penalty of a warning.

Huarong was also subject to administrative penalties related to the Chinese Ministry of Finance, but the punishment was much less severe than Deloitte’s.

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