Danny McCance 1 Aug 2019 02:03pm

Chinese stock market hit by Ruihua CPAs “accounting scandal”

Beijing-based accountancy firm Ruihua Certified Public Accountants (CPAs) has found itself at the centre of an accounting scandal after one of its clients was found to have inflated profits

Earlier this month, the China Securities Regulatory Commission (CSRS) opened an investigation into the firm, the Financial Times reported.

Ruihua CPAs was the auditor for a listed company, which has not been named, that was found to have inflated profits by RMB12bn (£1.43bn) over four years.

More than 50 Ruihua CPAs clients were reported by local news as having temporarily stopped IPOs and private capital raising.

The CSRS also held off approving IPOs for as many as 20 Ruihua CPAs clients, as well as delaying some listings on China’s new technology stock exchange Star Market, according to the FT.

In November, Ruihua CPAs left RSM International to become an exclusive member of Crowe Global’s network – which it originally joined nine years prior.

Crowe has been contacted for further comment.