Big Four cut ties to China’s debt-ridden property giants as developers delay results
The Big Four auditors have begun cutting their links to China’s heavily indebted property developers, amid mounting concerns over the sector’s debt crisis.
Accountancy giants Deloitte and PwC have both pulled out of auditing at a slew of Chinese property developers over the past three months.
The exits come as PwC is reportedly set to fully pull out of auditing Chinese property companies, having already cut its ties to major developers including Shimao Group, Hopson Development, Ronshine China, and Powerlong Real Estate.
The resignations come as 10 of China’s major property developers have now said they will delay publication of their audited results.
Last week, Shenzhen headquartered property developer Kaisa joined Chinese property giant Evergrande in announcing delays to their audited results.
The delayed results come as investors wait for more information as to the state of China’s property market, amid concerns around the impact the sector’s debt crisis may have on the global economy.
The resignations also come as the Big Four accountants face mounting criticism over their handling of Chinese property developers accounts.
In particular, auditing giant PwC has come under fire for its audit of Evergrande after the auditor last year green lit its accounts.
Speaking to City PM accountancy expert Atul Shah explained that in pulling away from China’s major property developers, the Big Four are seeking to reduce their “audit risk”.
The moves to cut ties come as the Big Four have come to dominate the Chinese market in recent decades, having built up large-scale operations in China and Hong Kong.