PricewaterhouseCoopers and its Guangzhou branch knew that there were major misstatements in Evergrande Real Estate's financial statements during the audit. Administrative penalties included the suspension of its business for six months and the revocation of its Guangzhou branch.
The penalties were imposed because the firm failed to perform due diligence in its work involving Evergrande, did not maintain due professional scepticism, and failed to discover financial fraud of large scale and high proportion.
PwC acknowledged its auditors in China fell unacceptably below standards during their work with Evergrande. A comprehensive remediation programme will build a stronger PwC China firm for the future.
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