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China fines Deloitte $31 million for audit negligence

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BEIJING (Reuters) – China has fined audit firm Deloitte

.9 million yuan ($

.8 million) the Ministry of Finance said on its website on Friday that China Huarong Asset Management Co., Ltd. failed to fulfill its duties in asset quality assessment.

Deloitte’s operations in Beijing will also be suspended for three months, the Ministry of Commerce said in a statement.

China Huarong and its investment division were fined due to internal governance failures, risk control failures and serious inaccurate accounting information 50 arrive52, the statement added.

Deloitte said in a statement published on its website that it respects and accepts the ministry’s decision.

“We regret that, in this matter, the Ministry of Finance considers that certain aspects of our work fell short of the required audit standards,” it said. explain.

Deloitte also stated that it has not received any information from Huarong indicating that it intends to make any restatements of past financial statements, nor has it identified any Amendments to relevant audit reports are necessary.

Huarong said in a separate statement that the company and its seven subsidiaries had received , Yuan fine each.

Huarong said the issue of its punishment had no direct impact on the company’s current and future business, adding that it would strengthen its internal control and risk management systems.

The Ministry of Finance stated that Deloitte failed to discover the real situation of the underlying assets during the audit and ignored the approval compliance of Huarong’s major investment matters.

The accounting firm failed to issue appropriate audit opinions on the identified abnormal Huarong transactions, and did not obtain sufficient and appropriate audit services when providing audit services. evidence, it is added.

Huarong, one of the four major state-owned bad creditors, fell into turmoil because it failed to release its

Income on time. In the end, a huge loss was reported.

The company was later injected into CITIC Group as its Largest shareholder in government-led restructuring and has disposed of non-core businesses.

(1 USD=6.200 1000Chinese YuanRMB)



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