The Chinese affiliates of five major accounting firms violated U.S. securities laws by failing to produce work papers of their audits of several China-based companies under SEC investigation, the commission charged Monday.
The firms that the SEC, which did not list the China-based companies it is investigating, charged are Deloitte Touche Tohmatsu Certified Public Accountants Ltd., Ernst & Young Hua Ming LLP, KPMG Huazhen, PricewaterhouseCoopers Zhong Tian CPAs Ltd. adn BDO China Dahua Co.
"Only with access to work papers of foreign public accounting firms can the SEC test the quality of the underlying audits and protect investors from the danger of accounting fraud," Robert Khuzami, the SEC's enforecment director, said in a statement. "Firms that conduct audits knowing they cannot comply with laws requiring access to those work papers face serious sanctions."
Mike Obel assigns, edits and writes stories about business, markets, finance and economics. Before coming to International Business Times, he worked on the Finance Desk of...