SEC subpoenas Deloitte Shanghai after client fraud

SEC subpoenas Deloitte Shanghai after client fraud

US regulator the SEC has called Deloitte Shanghai to court after it refused to give up audit documents pertaining to client fraud

DELOITTE SHANGHAI may be dragged to court by US regulator the SEC after it failed to turn over documents relating to an audit that sparked the firm’s resignation as auditor.

Longtop Financial Technologies Limited was de-listed on the US stock market after Deloitte uncovered evidence of fraud and warned the previous year’s audit report could not be trusted.

The SEC issued a subpoena for the relevant documents in May this year and Deloitte had until 8 July to comply.

Director of the watchdog’s division of enforcement, Robert Khuzami, said: “Compliance with an SEC subpoena is not an option, it is a legal obligation … recipients who refuse to comply should expect serious legal consequences.”

This is the latest in a series of audits that have laid bare questionable accounting practices at China-based companies on the US stock exchange, leading to a spate of auditor resignations and de-listings.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource