Deloitte agrees to pay $31 mln fine to China after mistakes in audit

Robert Besser
20 Mar 2023, 15:37 GMT+10

China has fined auditing firm Deloitte $30.8 million, claiming it failed to properly evaluate the quality of the assets of Huarong Asset Management.
Further, Beijing has fined China Huarong and its investment arms due to what it described as internal governance lapses, risk control failures and severe inaccuracies in its accounting information.
The finance ministry has blamed Deloitte for failing to determine the true situation of the company's assets in its audits.

BEIJING, China: Following the inability of China Huarong Asset Management Co Ltd to release financial reporting obligations in 2020, China has now fined auditing firm Deloitte $30.8 million, claiming it failed to properly evaluate the quality of the assets of Huarong.

The announcement was made last week on the finance ministry's website.

Further, Beijing has fined China Huarong and its investment arms due to what it described as internal governance lapses, risk control failures and severe inaccuracies in its accounting information from 2014 to 2019, the ministry's statement added.

Following the imposition of the fines, Huarong officials said, it would strengthen its internal controls and its risk management systems.

The finance ministry has blamed Deloitte for failing to determine the true situation of the company's assets in its audits and ignoring the correct approval compliance that normally directs Huarong's major investment matters.

China also charged that Deloitte did not issue proper audit opinions after identifying abnormal transactions by Huarong, and it did not seek appropriate evidence about financial concerns during its audits, it added.

Huarong, a state-owned distressed-debt manager, did not release its 2020 earnings on time. Only afterwards did it report a significant loss.

"We regret that, in this matter, the MOF considers that certain aspects of our work fell below the required auditing standards," Deloitte said in a statement.

Meanwhile, Huarong has said the company and its seven subsidiaries had each received a $14,500 fine.

Watch latest videos

News RELEASES

Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to India Gazette.

More Information

32 ℃

Haze in New Delhi/Gandhi

Business

Section

U.S. stock markets under pressure at start of week

NEW YORK, New York - U.S. stocks started the week under pressure on Monday. "Markets are catching their breath after ...

JPMorgan announces closure of 21 US First Republic Bank bank branches

NEW YORK CITY, New York: A JPMorgan Chase & Co spokesperson has confirmed that as part of the bank's efforts ...

US Pentagon to pay SpaceX Starlink to provide internet for Ukraine

WASHINGTON D.C.: The Pentagon said this week that the satellite communications service started by billionaire Elon Musk, SpaceX's Starlink, has ...

Boeing CEO says not worried about new China passenger aircraft

CHARLESTON, South Carolina: During a media tour this week at Boeing's facilities in Charleston, South Carolina, company CEO Dave Calhoun ...

Facebook threatens to remove news content from Calif. over payments

MENLO PARK, California: Facebook parent company Meta Platforms has said it would remove news content in California if the state ...

EU drawing up AI regulations fearing power of artificial intelligence

BRUSSELS, Belgium: EU tech chief Margrethe Vestager has said that a draft code of conduct on artificial intelligence (AI) could ...

Delhi

Section