WASHINGTON — The Securities and Exchange Commission charged China-based affiliates of the five largest U.S. accounting firms Monday with violating securities laws, saying the firms failed to produce work papers from their audits of nine China-based companies that are under SEC investigation.
The SEC said the firms refused to cooperate in part because the accountants “interpret the law of the People’s Republic of China as prohibiting” them from releasing the papers.
The firms under investigation by the SEC are the Chinese affiliates of Deloitte, Ernst & Young, KPMG, PricewaterhouseCoopers and BDO.
“Firms that conduct audits knowing they cannot comply with laws requiring access to these work papers face serious sanctions,” Robert Khuzami, the commission’s enforcement director, said in a statement.
Business, Pages 20 on 12/04/2012