(Image source: Visual China)
In the midst of the storm, PricewaterhouseCoopers lost big orders. A Blue Whale News reporter noticed that recently, a number of A-share listed companies have proposed to change accounting firms, such as Guangdong Electric Power A (000539.SZ), China Railway (601390.SH), China Merchants Bank (600036.SH), etc., and the number continues to increase.
Insurance giant China Insurance (601319.SH) has also replaced PricewaterhouseCoopers, which it has served for three years. According to the latest announcement from China People's Insurance Company, the board of directors of the company deliberated and passed the “Proposal on Hiring the 2024 Accounting Firms of Group Companies”. It is proposed to appoint Ernst & Young Huaming (“EY Huaming”) as the company's 2024 domestic financial statements and internal control auditor, and to appoint Ernst & Young (hereinafter referred to as “EY Hong Kong”) as the company's 2024 international financial statements auditor. The bill still needs to be submitted to the shareholders' meeting for consideration.
(Source: China People's Insurance Announcement)
Referring to the reason for changing the accounting firm, China People's Insurance Company stated that considering the company's demand for audit services, according to the relevant regulations on the selection and employment of accounting services, the company plans to appoint Ernst & Young Huaming Certified Public Accountants (Special General Partnership) and Ernst & Young as auditors for 2024 financial statements and internal control.
At the same time, it was mentioned that the company communicated with PricewaterhouseCoopers Zhongtian (Special General Partnership) and PricewaterhouseCoopers (Special General Partnership) and PricewaterhouseCoopers, which had no objection to the original appointment of accounting firms.
After completing the 2023 audit, PricewaterhouseCoopers Zhongtian and PricewaterhouseCoopers have provided audit services for China People's Insurance for 3 consecutive years.
According to the 2023 annual report of China People's Insurance Company, PricewaterhouseCoopers Zhongtian Certified Public Accountants (Special General Partnership) /PricewaterhouseCoopers PricewaterhouseCoopers and PricewaterhouseCoopers PricewaterhouseCoopers (CPA)/PricewaterhouseCoopers and PricewaterhouseCoopers (CPA) PricewaterhouseCoopers (Special General Partnership) and PricewaterhouseCoopers PricewaterhouseCoopers (CPA)/PricewaterhouseCoopers PricewaterhouseCoopers (CPA)/PricewaterhouseCoopers PricewaterhouseCoopers (CPA)/PricewaterhouseCoopers In addition, PwC also provides non-certification services to China People's Insurance and various subsidiaries at a total cost of RMB 640,000.
As an auditor that has cooperated with China Evergrande for 14 years, PwC is mired in Evergrande's financial fraud crisis. PwC issued a standard unqualified audit report on Evergrande's 2019 and 2020 financial reports involving fraud. The market is paying close attention to PwC's responsibility in the Evergrande case.
In the insurance industry, in addition to China People's Insurance, China Taiping (0966.HK), which is listed on the Hong Kong stock market, also announced that the service period of PricewaterhouseCoopers, the company's current auditor, will expire at the end of the 2024 Annual General Meeting of Shareholders. The company carried out the bidding and procurement process accordingly. According to the results of the tender and procurement, and as recommended by the board review committee, the board of directors recommended appointing KPMG to replace the retired PricewaterhouseCoopers as the company's auditor for the year ended December 31, 2024. The proposed appointment is subject to approval by shareholders at the Annual General Meeting of Shareholders.
Meanwhile, in May 2023, China Taiping just changed its auditor from KPMG to PricewaterhouseCoopers.
“The change of audit institutions by listed companies is beneficial to maintaining the independence and objectivity of the audit.” Some industry insiders analyzed that at this point, it is also sending a positive signal to investors and strengthening trust.