① CNPC announced the “cancellation of the renewal” of PricewaterhouseCoopers tonight, only 2 months since the company previously announced its proposed renewal; ② Recently, major blue chips such as China Insurance, China Railway, and China Merchants Bank “refunded” PwC; ③ In the 2023 annual report audit, PwC served a total of 107 A-share listed companies, including heavyweight industry giants and leading Chinese state-owned enterprises.
Financial Services Association, May 30 (Reporter Wang Bin) Following China Insurance (601319.SH), CNPC (601857.SH) also issued an announcement tonight announcing the cancellation of the “Proposal on the Company's Employment of Domestic and Foreign Accounting Firms 2024", which was originally scheduled to be submitted to the Company's 2023 Annual General Meeting of Shareholders for review on June 5, which means that the company will no longer renew PricewaterhouseCoopers as the company's auditor.
CNPC stated in the announcement that the cancellation of the above bill was “due to recent matters relating to the audit industry that require further verification.” Meanwhile, the matter was decided after negotiations between the company and PricewaterhouseCoopers Zhongtian Certified Public Accountants (special general partnership) and PricewaterhouseCoopers Zhongtian (responsible for overseas audits, collectively known as PricewaterhouseCoopers).
Going back simply, on March 25, China Petroleum Corporation's board of directors passed a bill to renew PricewaterhouseCoopers as the company's auditor. The estimated audit fee for 2024 is 48.5 million yuan.
A Financial Services Association reporter noticed that China People's Insurance Company also announced the change of accounting firms last night. The company plans to appoint Ernst & Young Huaming (Special General Partnership) as its 2024 domestic financial statements and internal control auditor, and plans to appoint Ernst & Young as its 2024 international financial statements auditor. PricewaterhouseCoopers Zhongtian (Special General Partnership) and PricewaterhouseCoopers Zhongtian (Special General Partnership) will no longer act as auditors.
As for the reason for the change, China People's Insurance said it “comprehensively considers the company's demand for audit services.” According to the announcement, PricewaterhouseCoopers previously provided audits for China People's Insurance for 3 consecutive years from 2021 to 2023, and has yet to touch the mandatory rotation period for state-owned financial enterprise auditors (8 years) as stipulated by the Ministry of Finance.
Earlier, on May 28, Huada Technology announced on the Hong Kong Stock Exchange that the board of directors of the company had proposed not to renew PricewaterhouseCoopers as an auditor (auditor), and recommended that China Audit Zhonghuan (Hong Kong) be the auditor.
It is worth noting that since Evergrande's financial fraud case was investigated and punished by the Securities Regulatory Commission, PricewaterhouseCoopers, which issued an unqualified audit report for Evergrande Real Estate's annual report, has been “cancelled” by several listed companies, including China Merchants Bank (600036.SH), China Railway (601390.SH), and Dongpeng Drinks (605499.SH). The reason for this may be related to the collapse of PwC's external trust.
According to Wind data, there are 107 A-share listed companies that audit the 2023 annual reports of PricewaterhouseCoopers, and there are also 15 A-share companies whose overseas auditors for 2023 reports are PricewaterhouseCoopers. Perhaps PwC's “wave of chargebacks” has just begun.
At the same time, there are also listed companies that have renewed PricewaterhouseCoopers as the 2024 auditor. For example, the Bank of China (601988.SH) announced on March 28 this year that it plans to renew PricewaterhouseCoopers. The estimated audit fee for 2024 is 101 million yuan (of which 12 million yuan is the internal control audit fee).
In April of this year, an anonymous report on “Who brought PricewaterhouseCoopers into the Evergrande fire pit” was circulated online. On April 19, the Hong Kong Accounting Supervisory Authority said it would investigate PricewaterhouseCoopers's role in auditing the accounts of China Evergrande Group based on a “report letter”. The Hong Kong Accounting and Financial Reporting Council (AFRC) said in an announcement that the widely circulated report “expressed serious concern” about PricewaterhouseCoopers's quality management system and the potential lack of audit quality carried out by China Evergrande Group. The announcement stated that “in view of the seriousness of these allegations,” the Finance and Finance Bureau “has a responsibility to launch an investigation.”