(MENAFN) The Chinese Ministry of Finance has imposed a record fine of 211.9 million yuan ($30.8 million) on the global accounting firm Deloitte for negligence in its audit of bad-debt manager China Huarong. According to the ministry, Deloitte failed to detect the condition of Huarong's underlying assets and objectively assess its business operations from 2014 to 2019. Additionally, Huarong concealed the fact that it experienced a number of internal and risk control failures at the time. The ministry also noted that Deloitte did not maintain a professional skeptical attitude, did not effectively conduct essential auditing procedures, and did not obtain sufficient and adequate auditing evidence.
Apart from the fine, Beijing halted operations at Deloitte’s Beijing branch for three months and suspended the licenses of two certified Deloitte accountants. Meanwhile, Huarong and its seven subsidiaries were fined 100,000 yuan each over internal governance and risk control failures, as well as “severely distorted” accounting data.
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