PwC Loses Bank of China as Client Amid Regulatory Scrutiny

PwC has lost its largest client in mainland China, the Bank of China, to rival EY. The Bank of China, which had initially planned to reappoint PwC as its auditor for 2024, has decided to switch to EY. This decision is pending shareholder approval.

The move is part of a broader trend of Chinese firms distancing themselves from PwC amid a regulatory investigation into the firm’s work for China Evergrande Group. PwC, which was the leading auditing firm in China, has seen significant client losses recently. The Bank of China paid PwC 193 million yuan ($27 million) in auditing fees last year. PwC also lost its three next-largest domestically listed clients: China Life Insurance, China Telecom, and PICC, according to filings.

Regulatory scrutiny of PwC intensified following its audit of Evergrande, which faces accusations of a $78 billion fraud. PwC audited Evergrande for nearly 14 years until early 2023. Chinese authorities have since advised state-owned enterprises and listed companies to avoid auditors with recent regulatory fines, contributing to PwC’s loss of at least 50 clients.

EY and KPMG have acquired many of PwC’s former clients. PwC had audited the Bank of China since 2021, following an eight-year tenure by EY, in compliance with Chinese rules limiting auditor terms for state-owned firms.