PwC “breaks up” with Evergrande, which has been cooperating for 14 years

In recent years, domestic real estate companies have had a hard time, and third-party audit institutions have been under pressure. Now that Evergrande is facing reorganization and the critical period when the financial report is released, it is difficult to reach a consensus on the 14-year cooperative relationship between Evergrande and PricewaterhouseCoopers. In the past year, PwC has resigned from the positions of auditors of many mainland developers including Hopson Development, Rongxin China, Powerlong Real Estate, Shimao Group, and Dexin China. Evergrande’s breakup is also expected.

Auditors are responsible for reviewing financial report data of listed companies. Therefore, there are also some potential risks in the process of dealing with enterprises that have been out of danger. Therefore, the audit is more stringent, which makes the audit time longer. Last year, the Hong Kong FRC launched an investigation into PwC’s participation in the audit of Evergrande’s 2020 annual accounts to protect the interests of shareholders and the investing public, thereby maintaining public confidence in the financial market and the independent auditor’s regulatory system.

In order to improve its own security, PricewaterhouseCoopers must be more stringent in auditing the financial reports of the Evergrande Department, so the information provided by the Evergrande Department is required to be more comprehensive and detailed. For example, what Evergrande is required to provide includes cash flow forecasts and measures to obtain cash flow in the future, information on land relocation and the 13.4 billion repayment plan for Evergrande’s property, etc. For Evergrande, it may not be able to provide it in a short time. It is now the critical moment for Evergrande’s annual report review. PricewaterhouseCoopers has gone, and a new auditor will take over. I hope everything will go as Evergrande wishes.