Dubai, UAE—Signaling its continued concerns about data security, China has urged state-owned firms to phase out using the four biggest international accounting firms, Bloomberg reported.
The decision comes even after Beijing reached a landmark deal to allow US audit inspections on hundreds of Chinese firms listed in New York, the report said.
Citing people familiar with the matter, Bloomberg said China’s Ministry of Finance is among government entities that gave the so-called window guidance to some state-owned enterprises as recently as last month, urging them to let contracts with the Big Four auditing firms expire.
While offshore subsidiaries can still use US auditors, the parent firms were urged to hire local Chinese or Hong Kong accountants when contracts come up, the report said.
China is seeking to rein in the influence of the US-linked global audit firms and ensure the nation’s data security, as well as to bolster the local accounting industry, the people told Bloomberg.
Beijing has been giving the same suggestion to state-backed firms for years, but recently re-emphasized that companies should use other auditors than the Big Four, the people added. No deadline has been set for the changes and replacements may happen gradually as contracts expire.