China has chosen seven audit firms including PwC, BDO, and Grant Thornton to examine the overseas assets of major state-owned enterprises (SOEs) following an open tender held last month.
The move came after a former audit official warned that more than 110 SOEs’ overseas assets valued at about 4 trillion yuan ($637 billion) were not audited due to insufficient audit staff.
Corruption related to offshore state assets is particularly severe in the merger and acquisition process, said Dong Dasheng, former deputy chief of the National Audit Office.
Others audit firms winning the tender include Baker Tilly, Union Power, Da Hua, and ShineWing, according to the website of State-Owned Assets Supervision and Administration Commission (SASAC), which supervises major SOEs.
According to the tender announced last month, the audits will be conducted on SOEs’ overseas assets and on key projects.
It’s the first time Chinese authorities openly selected independent audit firms to look into the SOEs’ offshore assets.
Sources: South China Morning Post, Reuters, China Daily, Beijing Youth Daily (中国青年报), China Business Journal (中国经营报)
Hui Zhi is the Senior Manager for Content with the China Compliance Digest, where a version of this post first appeared.