Top accounting firms face charges over China data

Top accounting firms face charges over China data
Posted: 04 December 2012 0134 hrs
     
WASHINGTON: US market regulators charged the China affiliates of five top accounting firms Monday with violation of securities laws for refusing to provide audit data related to China-based companies.

"The audit materials are being sought as part of SEC investigations into potential wrongdoing by nine China-based companies whose securities are publicly traded in the US," the Securities and Exchange Commission said.

The five firms charged were BDO China Dahua, Deloitte Touche Tohmatsu Certified Public Accountants, Ernst & Young Hua Ming, KPMG Huazhen, and PricewaterhouseCoopers Zhong Tian.

The SEC said they violated the Securities Exchange Act and the Sarbanes-Oxley Act, which requires foreign public accounting firms to provide the SEC upon request with audit work papers involving any company trading on US markets.

SEC investigators have been trying to obtain the data for months from the audit firms but they have refused to cooperate, it said in a statement.

"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," said Robert Khuzami, director of the SEC's Division of Enforcement.

"Firms that conduct audits knowing they cannot comply with laws requiring access to these work papers face serious sanctions."

- AFP/fa

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