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Evergrande crisis puts PwC role in spotlight

Auditors face rising reputational and legal risks in dealing with Chinese companies

If Evergrande was listed in London, rather than in Hong Kong, politicians and regulators would already be jostling into position to examine the work of its auditors.

The Chinese property developer has expanded aggressively since it was founded in 1996. It has grown into one of China’s largest companies, with more than 1,000 real estate projects in 234 cities and total liabilities of $300bn — equal to around 2 per cent of China’s gross domestic product. Now it is in the midst of a crisis, teetering on the brink of defaulting on some of its loan repayments.

In its accounts for the first half of this year, its board of directors expressed concerns about the company’s ability to continue as a going concern — one of the first times Evergrande has publicly acknowledged its serious financial problems.

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