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The Accounting and Financial Reporting Council (AFRC) has been closely collaborating with the Supervision and Evaluation Bureau of the Ministry of Finance of the People’s Republic of China (MoF) in maintaining the standards and quality of cross-border audit services.

In an announcement published today, the MoF has imposed administrative sanctions against Mainland audit firm PricewaterhouseCoopers Zhong Tian LLP for its serious infractions in the audit work on Hengda Real Estate Group Co Ltd (Hengda).  This marks a significant milestone in the coordinated cross-border enforcement actions in relation to the audits of China Evergrande Group, of which Hengda is a principal subsidiary.

Notwithstanding the seriousness of this anomalous incident and its potential regulatory implications for the group’s auditors, the accounting profession of Hong Kong remains credible and well-equipped to provide a sufficient supply of high-quality audit services that our capital markets require.

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