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The Chinese securities regulator previously found that Evergrande had inflated its revenues by almost $80 billion (c. £61bn) despite PwC’s clean bill of health.

This ban, potentially accompanied by a significant fine, would be the most severe action ever taken against a Big Four firm in China. It reflects Beijing’s increased scrutiny of auditors amid financial scandals, particularly in the property sector, Financial Times reports.

While not threatening PwC Zhong Tian’s survival, the ban will be highly disruptive. It will prevent PwC China from conducting regulated activities, impacting financial results, IPOs, and more. PwC China assures clients that staff will continue working during the suspension and complete 2024 audits once the ban lifts in March.

This nationwide ban surpasses the punishment Deloitte received last year for “serious audit deficiencies.” Many mainland-listed clients are prohibited from working with a sanctioned auditor for three years.

While mainland-listed and state-owned clients make up a minority of PwC China’s revenue, the firm is actively reassuring its largest international clients, including Alibaba and Tencent, that it can complete their 2024 audits.

The loss of clients and looming penalties have prompted accelerated lay-offs across PwC’s branches in China to cut costs. PwC China said “it would not be appropriate to comment” on the regulatory matter while it is still ongoing.