Dahua Accounting Firm Faces Suspension of Securities Service Business Due to Audit Failures
On May 13, 2024, the official WeChat account of Dahua Accounting Firm (Dahua Firm) issued a statement announcing that the Jiangsu Securities Regulatory Bureau has imposed administrative penalties on the firm and relevant personnel. The penalties come as a result of the firm’s failure to diligently audit Jin Tongling’s annual financial report.
The suspension of Dahua Firm’s securities service business will last for 6 months, from May 10, 2024, to November 9, 2024. Public information reveals that Dahua Law Firm, founded in 1985, is one of the eight major accounting firms in China. It is one of the first firms approved for H-share listed auditing qualifications and serves over 10,000 customers, including nearly 500 listed companies.
The recent penalties stem from Jin Tongling’s violations of laws and regulations in information disclosure, which led to administrative penalties imposed by the China Securities Regulatory Commission. This is not the first time Dahua has faced punishment, having been repeatedly fined for violations involving financial fraud by listed companies.
Following news of the penalties, more than 10 A-share companies have announced the cancellation of cooperation with Dahua Law Firm. Companies such as Haixin Food, Zhongyuan Internal Distribution, Power Diamond, and Bosi Software have decided to cancel their plans to appoint Dahua as their annual review agency for 2024.
Furthermore, Dahua Exchange has a total of 38 IPO projects lined up, including refinancing projects and mergers and acquisitions. However, with the suspension of the firm’s securities service business, these projects may need to be put on hold until the measures are lifted.
The news of Dahua’s penalties and the ensuing cancellations highlight the impact of regulatory actions on business relationships and the importance of upholding diligence and integrity in the accounting and auditing industry.
Voice of Hope encourages transparency and truth-telling in China and invites individuals to join in their efforts to promote honesty and accountability in society.