China Fines Deloitte $30.8 Million for Neglecting Asset Quality Assessment of China Huarong Asset Management

On Friday, the Chinese finance ministry announced on its website that auditing firm Deloitte has been fined 211.9 million yuan ($30.8 million) for neglecting its responsibilities in evaluating the asset quality of China Huarong Asset Management Co Ltd.

The Chinese finance ministry has announced that Deloitte’s operations in Beijing will be suspended for three months.

Additionally, China Huarong Asset Management Co Ltd and its investment subsidiaries have been fined for internal governance deficiencies, risk control failures, and significant inaccuracies in accounting information from 2014 to 2019, according to the statement released by the ministry.

Deloitte has released a statement on its website in response to the fine and suspension of its Beijing operations, indicating that it accepts and respects the decision of the Chinese finance ministry.

The statement further notes Deloitte’s regret that certain aspects of their work did not meet the required auditing standards.

Additionally, Deloitte has stated that it has not received any communication from China Huarong Asset Management Co Ltd indicating an intention to restate past financial statements, and no changes to the relevant audit reports have been deemed necessary.