Hong Kong’s audit regulator said it would launch a fresh probe into PwC over an apparent whistleblower report that accused it of mis-steps in auditing defaulted Chinese developer Evergrande, intensifying pressure on the Big Four firm.The open letter, signed by “a group of PwC partners”, began to circulate in Chinese media last weekend. It cited “significant concerns regarding potential alleged deficiencies” in PwC’s systems of quality management and the quality of its audit work for Evergrande, the Chinese territory’s Accounting and Financial Reporting Council said on Friday.
“Given the gravity of these allegations and the necessity to safeguard the interests of the investing public . . . the AFRC is obliged to initiate an investigation,” its statement said.
The anonymous letter, written in Chinese, accused PwC of failing to establish and maintain an effective system of quality control to ensure audit quality and compliance with professional standards, the AFRC said. The Financial Times has not been able to independently determine the provenance of the letter.