China Set to Impose Record Fine on PwC Over Evergrande Audit

China is expected to levy a historic penalty against PricewaterhouseCoopers LLP (PwC), with the potential to suspend some operations of the global auditor within the country. This action comes as a response to PwC's auditing role in the significant financial discrepancies linked to the China Evergrande Group, a major real estate developer. The Ministry of Finance, which has not yet finalised the decision, may impose a fine exceeding 1 billion yuan ($138 million) on PwC as early as this week, surpassing the previous record of 212 million yuan set in 2023 against Deloitte.

Further sanctions might include the temporary shutdown of PwC's offices in mainland China, although details are still under review. This development follows an extensive investigation into Evergrande, which recently led to a 4.18 billion yuan fine against the company for overstating revenues by 564 billion yuan from 2018 to 2020.

The implications of such penalties are significant, with potential damage to PwC's reputation and broader impacts on public trust in accounting practices. The punitive measures against PwC underscore a broader crackdown on financial irregularities under President Xi Jinping's administration, aiming to stabilise and secure China's economic landscape.