China has pledged to toughen oversight of international and local auditors as President Xi Jinping tries to stamp out risks to the country’s financial system after a series of massive corporate failures among property and banking groups.
Zhu Zhongming, vice-minister of finance, told Sharon Thorne, the global chair of Deloitte, that Beijing would “strictly enforce financial discipline” and step up scrutiny over accounting firms in China “including the Big Four”, according to a finance ministry statement.
The warning, issued when the two met in Beijing, signals the onset of tighter scrutiny of the sector and rising uncertainty in the accounting and consulting industry over the future of Deloitte, PwC, KPMG and EY in China. Decades spent building market-leading positions in the world’s second-biggest economy have been undermined by a wave of delayed financial results and defaults by the companies they audit.