Chinese authorities have urged state-owned firms to stop using the four biggest global accounting firms as Beijing seeks to rein in the influence of Western audit firms, signaling continued concerns about data security, Bloomberg News reported on Wednesday.
China’s Ministry of Finance is among government entities that gave informal guidance to some state-owned enterprises as recently as last month, urging them to let contracts with PwC, EY, KPMG and Deloitte expire, the report said, citing people familiar with the matter.
While offshore subsidiaries are allowed to use the global auditors, their parent firms were urged to hire local Chinese or Hong Kong accountants when contracts come up, one of the people told Bloomberg.
Data policy has become one of several areas that China has tightened its grip over to ensure practices doesn’t pose threat to the country’s national and economic interests.
The country implemented its Data Security Law in September 2021 which broadly requires Chinese companies and localities to categorize data based on its relevance to national security and the economy.
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