SIMIC

CHINESE authorities have urged state-owned enterprises (SOE) to phase out the use of the four biggest international accounting firms, signalling continued concerns about data security even after Beijing reached a landmark deal to allow US audit inspections on hundreds of Chinese firms listed in New York, reports Bloomberg.
China's Ministry of Finance is among government entities that gave the so-called window guidance to some state-owned enterprises as recently as last month, urging them to let contracts with the Big Four auditing firms expire, according to people familiar with the matter.
While offshore subsidiaries can still use US auditors, the parent firms were urged to hire local Chinese or Hong Kong accountants when contracts come up, one of the people said, asking not to be identified discussing private information.
China is seeking to rein in the influence of the US-linked global audit firms and ensure the nation's data security, as well as to bolster the local accounting industry, the people said.
Beijing has been giving the same suggestion to state-backed firms for years, but recently re-emphasized that companies should use other auditors than the Big Four. No deadline has been set for the changes and replacements may happen gradually as contracts expire.
The Big Four accounting firms are Deloitte, PwC, Ernst & Young (EY) and Klynveld Peat Marwick Goerdeler (KPMG). They collectively received revenue of US$2.99 billion from all Chinese clients in 2021, according to Bloomberg.