(Reuters) - The string of accounting scandals in China is prompting the “Big Four” audit firms to be on alert, fearing a blow up at a Chinese company could cause big reputational risk.
Reuters asked all four firms about their approach to working in China and whether the recent scandals have prompted them to review their procedures when taking on work for Chinese companies looking to list on exchanges.
The following are the official responses from the firms:
PricewaterhouseCoopers’ Edmond Chan, a senior partner in their capital markets group said his firm has always had a thorough approach to who they take on for IPO work. “All along we have adopted a very comprehensive risk procedure,” he said. “We have always held a very high level of professional skepticism when we take on clients from China or anywhere else in the world.”
“Quality is one of the most important priorities for Deloitte - both in terms of clients we accept and the quality of our work,” said a spokesman for Deloitte China.
“We have rigorous procedures in place for client and engagement acceptance which we continually review and update to address evolving market conditions.”
“KPMG continues to have a very thoughtful and structured engagement acceptance and ongoing risk assessment process. This is on a case by case basis,” said KPMG China partner Andrew Weir.
“To put things into context, there are lots of good Chinese companies listing in China and overseas, and we continue to be committed to helping them do so. As in all markets, we place great importance on the need to be selective.”
“As a global leader in assurance, tax, transaction and advisory services, we have a set of professional global policy and standard to deliver seamless, consistent, high-quality service, worldwide,” said a spokeswoman for Ernst & Young.
“We have always been cautious when it comes to take on new clients in every business case.”
Compiled by Rachel Armstrong. Editing by Michael Flaherty