Filing a case for investigation, losing large orders one after another, PwC's good days are over?

There are many financial stories

2024-05-29 17:41Published in Guangdong

After Evergrande was fined for financial fraud, PwC's good days are coming to an end.

What does an accounting firm do? The "gatekeepers" of the capital market are not the gatekeepers of listed companies and cover up their fraud. However, the reality is that the service fees of accounting firms are all given by listed companies, and when serving some "big financiers", they are often easy to become the "watchdogs" of listed companies.

An accounting firm covers up the financial fraud of real estate enterprises, defrauds loans, defrauds investors' money, deceives the people of the purchase of houses, the worst is the people who buy houses, the bank loan has collateral, and the investors can recover a little money no matter what, but the people are left only unfinished buildings, and the house has not been obtained, and the supply can not be interrupted.

Evergrande has committed financial fraud for two consecutive years, with a total of 564.1 billion yuan of inflated revenue and 92 billion yuan of inflated profits in its 2019 and 2020 annual reports. PricewaterhouseCoopers, which was responsible for the audit, issued an unqualified opinion.

If Evergrande's financial fraud had been discovered earlier and stopped in time, how many people would have been able to avoid being deceived. Let's simply calculate a data, in 2020, Evergrande's contracted sales will be 723.25 billion yuan, and the average house price will be 8,945 yuan / square meter, assuming that the average area of each set is 100 square meters, the price of that set is almost 900,000 yuan, and Evergrande sold almost 800,000 houses that year.

Not to mention that 800,000 houses are unfinished, but at least hundreds of thousands. Most ordinary home buyers empty a few wallets before getting into the car, and as a result, the house is not lived, and they have to pay off the mortgage and spend money on rent, which is extremely burdensome.

The duration of Evergrande's financial fraud is not one or two months, but two years, and the amount of fraud is not hundreds of millions, but more than 500 billion. If PwC says it's completely unaware, can you believe it?

has cheated so many people, and it is difficult to convince the public if they are not severely punished. According to the 21st Century Business Herald, PricewaterhouseCoopers is under investigation, and its Guangzhou members have been told that they can voluntarily choose to transfer to Shenzhen or Hong Kong.

It is impossible for PwC to completely dissociate itself from the relationship, and sky-high penalties are unavoidable, and it may also face penalties such as suspension of business for rectification. But to be honest, this is all light, think about the financial fraud of Enron in the United States, Arthur Andersen, one of the world's five largest accounting firms, went bankrupt and collapsed, and many people were still in prison.

Whether or not they were involved in the fraud, or how derelict it was, will have to wait for the results of the official investigation. But Evergrande's fraudulent amount is too large, and the impact is indispensable. Recently, PwC has lost large orders one after another.

Recently, China Merchants Bank announced that it intends to appoint Ernst & Young Huaming Certified Public Accountants and Ernst & Young as the auditors of the company's overall financial statements in 2024. In September last year, China Merchants Bank announced that it was ready to hire PwC, and now PwC has been abandoned.

Not only China Merchants Bank, but also 13 A-share listed companies, including China Railway, Dongpeng Beverage, and Mindray Medical, have canceled their cooperation with PricewaterhouseCoopers and hired other accounting firms. At this pace, there will definitely be companies that will cancel cooperation in the future.

To tell the truth, according to my meaning, the Evergrande financial fraud case should be made a typical case, just like the supervision of many social incidents, strict investigation and handling, and all parties involved in the fraud will be severely punished to form a deterrent.

In recent years, financial fraud of listed companies has been like a common occurrence, why is it so messy? It's not that the supervision and penalties are insufficient. Dahua Certified Public Accountants, which issued a standard unqualified audit report for Jin Tongling, a listed company that has been falsifying for six years, was fined 40 million yuan and suspended from relevant business qualifications for 6 months. It took 6 years to be punished for fraud, and it can be reopened after six months.

The most severe punishment should be to directly cancel the qualification of the practitioner, so as not to leave any room for the counterfeiters, so that other accounting firms do not dare to take another step beyond the thunder pool, and truly return the capital market to a clean environment.

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