Thursday 11 February 2021 11:29 am

China orders Deloitte to investigate PowerPoint whistleblower claims

China’s Ministry of Finance has asked Deloitte to conduct an internal investigation after an employee circulated a 55-page PowerPoint presentation that alleged accounting violations at the Big Four firm.

The anonymous employee sent the presentation to every Deloitte employee’s email, citing incidences involving listed companies around the world and China’s own RYB Education.

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The presentation then ended up on social media, circulating on Weibo, a Chinese website similar to Twitter.

The ministry said in an official notice on its website that it takes the allegations very seriously, and that it immediately called a meeting with the auditor’s leadership.

The PowerPoint alleged that when Deloitte was auditing the financial data of RYB Education in 2017, a member of the auditing project told the whistleblower “not to be so careful and fill the numbers randomly.”

The same member of staff also allegedly confessed to have “fabricated” many such figures in past audits.

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The whistleblower also alleged that a Beijing training school under RYB Education had spent most of its management fees raising the children of the school’s senior executives in overseas countries.

The Chinese ministry plans to work together with other authorities and will investigate the allegations on the slides, it said.

An approach of “zero tolerance” will be adopted and violations will be dealt with in accordance with the law.

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In a previous statement, Deloitte China threatened legal action on the “spread of false information about Deloitte”.

“We have noticed that there are currently several doubts about Deloitte Beijing’s individual audit projects in 2016 and 2017 circulating on social media platforms,” the statement said.

“In fact, the firm previously received a related matter reported by an employee through internal channels, and has conducted a comprehensive investigation of this, and found no evidence that affects the adequacy of our audit work. Therefore, the relevant audit work supports our audit opinion. We will investigate any queries we receive.”

City A.M. has contacted Deloitte for an updated statement.