PwC weighs halving of China financial services audit staff, say sources
By Julie Zhu
HONG KONG, July 16 (Reuters) -PricewaterhouseCoopers (PwC) is considering slashing up to half its financial services auditing staff in China, two people with knowledge of the matter said, as a regulatory investigation and an exodus of clients darken business prospects.
The move follows Chinese regulators' scrutiny of PwC this year for its role as the auditor of troubled property giant China Evergrande Group 3333.HK, which, in turn, triggered the exit of some clients.
PwC's financial services auditing operation employs at least 2,000 people across mainland China with main hubs in Beijing and Shanghai servicing clients such as banks, insurers, and asset and wealth managers, said the sources, who sought anonymity.
The firm, with 781 partners and nearly 19,000 employees in mainland China as of last September, according to its website, is also mulling laying off about 20% of the staff in other auditing teams and non-auditing business lines, they added.
PwC's China businesses range from consulting to tax services, besides auditing. The size of the cuts in its financial services auditing unit and other business lines is being reported for the first time by Reuters.
PwC China's layoffs started last week, and the overall target is expected to be met over a period of time, said the sources, who declined to be identified as they were not authorised to speak to media.
"In light of changes to the external environment, we are making some adjustments to better optimise our organisational structure to align with market demand," a PwC spokesperson said in an emailed statement.
Chinese authorities have been examining PwC's role in Evergrande's accounting practices after the securities regulator accused the developer in March of a $78-billion fraud over a period of two years through 2020.
PwC had been Evergrande's auditor for almost 14 years until it resigned in early 2023.
The firm faces a record fine of at least 1 billion yuan ($138 million) and a halt to operations of some of its mainland China offices due to failings in auditing Evergrande, Bloomberg said in May.
CLIENTS LEAVE
Over the past few months, a growing number of clients has been leaving PwC, mainly state-owned or -backed enterprises and financial institutions, following the launch of the regulatory investigation into its auditing of Evergrande.
The firm had about 400 Chinese clients, listed at home or in offshore markets such as Hong Kong or New York, by March this year, including tech behemoths Alibaba 9988.HK and Tencent 0700.HK.
A Reuters calculation based on filings showed more than 30 listed Chinese firms including state-owned China Life Insurance, China Cinda Asset Management Co Ltd, Bank of China and PetroChina, have dropped PwC as their auditor in recent months.
As client departures cloud revenue prospects, PwC has stepped up cost-cutting measures.
This month the firm asked its 1,000-strong financial services auditing team in Shanghai to take career-break leave of about 15 days in July and August, during which staff can still receive a fifth of their income, one of the sources said.
PwC's onshore arm - PricewaterhouseCoopers Zhong Tian LLP, had revenues of 7.92 billion yuan ($1.1 billion) last year, making it China's top-earning auditor, official figures show.
Reporting by Julie Zhu; Additional reporting by Ziyi Tang; Editing by Sumeet Chatterjee and Clarence Fernandez
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.
