PwC winding up operations in over a dozen countries to avoid scams: FT report

New Delhi, April 16 (IANS) PwC has wound up operations in more than a dozen countries that the top management considers risky or unprofitable, as the global audit giant aims to avoid scandals that have recently hit its accounting network, according to media reports on Wednesday.

PwC snapped ties with 10 member firms that were its local partners in Africa at the beginning of this month after mounting differences, according to a Financial Times report that cites people familiar with the discussions.

Local leaders said they had lost more than a third of their business in recent years as they were pressed by PwC's global executives to stop serving risky clients, and began negotiating an exit last year, the report said.

PwC has parted ways with its member firms in Zimbabwe, Malawi, and Fiji, according to a register of PwC entities and local news reports.

In another embarrassment for the audit firm, China's Ministry of Finance and the China Securities Regulatory Commission fined PwC's China unit a record 441 million yuan ($62 million) and imposed a six-month suspension over its audit of property giant Evergrande. This action was in response to Evergrande's $78 billion fraud, where the company inflated its financial reports between 2018 and 2020. PwC audited Evergrande for almost 14 years, until early 2023.

PwC was fined for audit failures, including "turning a blind eye" to and "condoning" Evergrande's fraud. The fine and suspension are the largest ever imposed on a Big Four accounting firm in China, according to some reports.

Similarly, last month, the UK's Financial Reporting Council slapped a penalty of 4.5 million pounds ($5.96 million) on PwC over its audit of Wyelands Bank for the 2019 financial year.

In Australia, there was a political uproar after it was found that a tax partner had misused confidential government information. PwC’s global bosses had then taken action to remove leaders.

PwC has also been barred from working for Saudi Arabia’s sovereign wealth fund for a year. The accounting firm is reported to be working on improving relations with the oil-rich kingdom so that it can get back into operation again.

--IANS

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