Deloitte is starting to become particularly concerned about doing
business in China. Last year, the Big Four auditing firms discovered
that a number of financial irregularities regarding a series of U.S.
listed companies centralized in China. Auditing firms become aware of
problems towards the end of April.
Deloitte has decided to discontinue doing business with Boshiwa last week on concerns the firm wasn't providing the appropriate answers to those questions. Deloitte feels it is crucial that any firms they do business with do so with full transparency.
Deloitte has since stopped doing auditing work for Daqing Dairy Holdings Ltd. earlier this week. That decision was made shortly after the firm's shares were suspended over a few allegations.
According to Linus Yip of First Shanghai Securities, auditors may continue to leave many of their Chinese clients, particularly ahead of earning season. This could create significant problems as companies go unaudited. Fears that auditors are no longer comfortable taking the risk of working with these clients could prompt more of them to break these engagements. As a result, it may be more difficult to catch financial irregularities and potential fraud.
The future of the auditing firms and their relationships with clients hinges largely on the new policies issued by the regulators and the responsibility auditors will be forced to accept.
Deloitte has decided to discontinue doing business with Boshiwa last week on concerns the firm wasn't providing the appropriate answers to those questions. Deloitte feels it is crucial that any firms they do business with do so with full transparency.
Deloitte has since stopped doing auditing work for Daqing Dairy Holdings Ltd. earlier this week. That decision was made shortly after the firm's shares were suspended over a few allegations.
According to Linus Yip of First Shanghai Securities, auditors may continue to leave many of their Chinese clients, particularly ahead of earning season. This could create significant problems as companies go unaudited. Fears that auditors are no longer comfortable taking the risk of working with these clients could prompt more of them to break these engagements. As a result, it may be more difficult to catch financial irregularities and potential fraud.
The future of the auditing firms and their relationships with clients hinges largely on the new policies issued by the regulators and the responsibility auditors will be forced to accept.
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