Recently, the Ministry of Finance and the China Securities Regulatory Commission (CSRC) have taken action against PricewaterhouseCoopers (PwC) with heavy penalties.

The Ministry of Finance imposed an administrative penalty on PwC for illegal activities related to the audit of Evergrande Real Estate's 2018 financial statements, confiscating illegal earnings and fining a total of 116 million yuan.

At the same time, PwC was warned, suspended from operating for six months, and its Guangzhou branch had its business license revoked.

The CSRC issued an administrative penalty for PwC's failure to diligently fulfill its duties in auditing Evergrande Real Estate's annual report and bond issuance, confiscating all business income of 27.74 million yuan during the case period and imposing a "maximum fine" of 297 million yuan, totaling 325 million yuan in fines and confiscations.

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The CSRC official stated that the aforementioned fine (325 million yuan) is close to the total amount of fines and confiscations imposed on more than 50 accounting firms for illegal and irregular activities over the past three years.

Next, the CSRC will continue to resolutely implement regulatory requirements that are "sharp and prickly," focusing on strict supervision and management, and continuously increasing the investigation and crackdown on financial fraud in the capital market and the failure of auditing institutions to diligently fulfill their duties, fully protecting the legitimate rights and interests of investors.

The two departments have imposed a combined heavy fine of 441 million yuan and a six-month suspension of business, and it seems that the PwC incident has been "settled."

However, it is worth noting that PwC may still face legal action from Evergrande's liquidators.

It is reported that the liquidators of China Evergrande have filed a lawsuit against PwC, accusing the accounting firm of "negligence" and "misrepresentation" in its work for Evergrande.

In fact, since the Evergrande financial fraud case was investigated by the CSRC, PwC has been at the forefront of public opinion.

Before the regulatory authorities issued the penalty, PwC has been successively abandoned by many institutions.

Data shows that as of September 13, 37 A-share companies, 7 Hong Kong stocks, and 9 fund companies (with their fund products) have dismissed PwC, with the total audit fees involved in the dismissal of PwC from A-share companies amounting to 653 million yuan last year.

This includes central state-owned enterprises such as China National Petroleum Corporation (601857.SH), China People's Insurance (601319.SH), China Merchants Bank (600036.SH), China Railway Group (601390.SH), Haitong Securities (600837.SH), and Tsingtao Brewery (600600.SH), as well as private enterprises such as Mindray Medical (300760.SZ), Dongpeng Beverage (605499.SH), and Fuyao Glass (600660.SH).

On September 14, five fund companies including Huaan, Boying, Huian, Yimi, and Puyan Anxin "broke up" with PwC, and the dismissal wave even showed a trend of intensifying.

Once prestigious, PwC is facing a severe crisis of trust.

For the company, what is lost is not only business but also the reputation accumulated over the years.

After this regulatory penalty, PwC also issued a statement saying that it respects and resolutely complies with the relevant administrative penalty decisions.

The members of the audit team involved in the Evergrande Real Estate case have terminated their labor relations with the company.

The company has taken a series of rectification measures, including increasing investment in personnel, training, and technology, and strengthening cultural construction and corporate governance.

Recently, PwC China has also undergone a "change of leadership."

The current Global Chief Risk and Regulatory Officer, He Muni, has been appointed as the Chairman of PwC China, and after the necessary procedures, she will be transferred to PwC China.

The company's "personnel turmoil" is inevitable.

Under the background of strict supervision, the capital market intermediary industry needs to truly bear the responsibility of the "gatekeeper" of the securities market.

Whether PwC can rebuild trust and save the company's reputation, and whether it can emerge from the "darkest moment," is the focus of many investors.

It is worth mentioning that with the slowdown in global demand, the accounting firm industry is not easy.

Recently, Deloitte announced its full-year financial report for fiscal year 2024, with global revenue of $67.2 billion in 2024, only a year-on-year increase of 3.1%, the lowest level since 2010.

PwC's latest performance has not yet been announced, but it can be anticipated that the company's performance may be even more "chilly."