The SEC has filed an administrative complaint against the China-based branches of the “Big 4” U.S. accounting firms and another accounting firm as a result of their refusal to release documents in connection with the SEC’s investigation of China-based companies that are listed on U.S. trading exchanges. The accounting firms targeted are: BDO China Dahua Co. Ltd; Deloitte Touche Tohmatsu Certified Public Accountants Ltd; Ernst & Young Hua Ming LLP; KPMG Huazhen (Special General Partnership); and PricewaterhouseCoopers Zhong Tian CPAs Limited.
According to a statement released by the SEC, “SEC investigators have been making efforts for the past several months to obtain documents from these firms.” In addition, the SEC stated that “[t]he audit materials are being sought as part of SEC investigations into potential wrongdoing by nine China-based companies whose securities are publicly traded in the U.S. The audit firms have refused to cooperate in the investigations.” The SEC expects that administrative hearing will be scheduled to determine the remedial sanctions against the firms. (“The SEC is Going After the China Branches of Big Four Accounting Firms for Failing to Turn Over Documents," Business Insider, December 3, 2012).