THE US markets watchdog yesterday hit the Chinese arms of five accounting firms with charges, after the affiliates failed to hand over audit documents the US body wants.
PwC, KPMG, Ernst & Young and Deloitte – the so-called big four – as well as BDO, have been charged with securities violations by the Securities and Exchange Commission (SEC), as part of an effort to get hold of documents from nine firms in total.
The SEC said an administrative law judge will now schedule a hearing to decide on the sanctions the authorities will use against these Chinese accounting arms.
Back in July the SEC had been attempting to go through Chinese regulators to get hold of the documents, which the SEC says are necessary to judge whether there were accounting irregularities.
But this move suggests that negotiations have come to a standstill.
“[It] is the result of conflicting laws between the US and China,” said PwC China. “This action involves an issue that needs to be resolved between the US and China.”
Deloitte and Ernst & Young echoed calls for officials of the two countries to come to an agreement.