• Register
Return to: Home > News > Big Four appeal SEC ban

Big Four appeal SEC ban

The Big Four in China have appealed the US Securities and Exchange Commission (SEC) six month ban which prohibits them to provide services to US listed Chinese companies.

All four joint ventures (Ernst & Young Hua Ming, KPMG Huazhen, Deloitte Touche Tohmatsu, and PwC Zhong Tian) as well as BDO's former Chinese firm DaHua, had been found guilty of violating the Sarbanes-Oxley Act (SOX) by the SEC for refusing to produce audit work papers and other documents related to China-based companies under investigation for alleged accounting fraud against US investors.

All firms involved have now responded to the January ruling by filling an appeal in which they argue that the ruling had "misconstrued the operative legal standard which provides that only a 'willful refusal to comply' with an SEC request for audit work papers or other documentation constitute a violation of SOX".

"It also ignored critical exculpatory evidence, and proposed sanctions that are inconsistent with the law," the firms said in their filling.

The appeal will now be heard by five SEC administrative law judges who can uphold, overturn or modify the initial ruling.

The judges could take months and longer to reach a decision and parties may then appeal to the US Court of Appeals in Washington.

Both the Sarbanes-Oxley Act and SEC Act require foreign public accounting firms to provide the regulator with audit work papers involving any company trading on US markets upon request.

However at the time all firms involved in the case claimed that such demands are in violation of Chinese secrecy laws and were unable to turn over audit working papers requested by the SEC in several fraud investigations.

Top Content

    Blockchain and the Big Four: does it deserve all the hype?

    Although still in its infancy, blockchain is one of the most talked-about technologies of 2018. Will the blockchain bubble burst, or will it live up to its reputation as the ‘new internet’? Eleanor Jerome investigates

    read more

    Malaysia: Ready to show its strength

    Recent changes have enhanced the quality of audit reports in Malaysia, giving the profession a welcome opportunity to demonstrate its value to clients. Paul Golden reports

    read more

    China: Regulating the Chinese dragon

    Harsh regulatory actions and looming US trade wars have been dampening expectations in a Chinese market still full of potential, finds Jonathan Minter

    read more

    Indigenous Australians: New checks and balances

    With fewer than 40 known qualified Indigenous Australian accountants, Jonathan Minter speaks to Shelley Cable from PwC Australia about how increasing this number is an important part of improving the financial literacy of Indigenous communities

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.