Firm Statement

Deloitte Hua Yong Settlement with the U.S. SEC Firm Statement

Published date: 29 September 2022

Deloitte Hua Yong ("We" or the "Firm") is always committed to compliance with auditing standards and to the highest standards of audit quality. In serving our clients, capital markets and the public interest, audit quality is the cornerstone of our business.

Deloitte Hua Yong has agreed a settlement with the U.S. SEC, including the payment of a settlement sum, bringing closure to a self-reported matter relating to certain deficient procedures identified in 12 fiscal year 2018 PCAOB audits. In reaching this settlement, the SEC has acknowledged the Firm's cooperation and remedial efforts.

On learning in June 2019 of potential deficiencies in certain fiscal year 2018 audit procedures, Deloitte Hua Yong carefully assessed the situation and decided to engage an external law firm to conduct an independent investigation, and self-reported the matter to the relevant regulators. The investigation found certain instances of deficient audit procedures which did not comply either with the PCAOB auditing standards or with the Firm’s own standards. Affected procedures found by the investigation were re-performed and effectively remediated. No changes to either financial statements or audit reports were found to be necessary.

We regret that, in this matter, certain aspects of our audit work fell below the required PCAOB auditing standards and the Firm's standards. Since 2019, we have undertaken significant efforts and made significant investments to reinforce high standards throughout our entire audit practice, including comprehensive measures to address the inappropriate practices found by the investigation.

We are committed to continual improvement and have also put in place enhanced monitoring to evaluate and further improve audit quality, and to continue to provide high-quality audits to serve our clients, capital markets and the public interest.