Danny McCance 5 Jun 2019 12:35pm

EY quits as Bank of Jinzhou auditors

The Big Four firm has resigned as auditor of one of China’s largest commercial banks after the firm found indications that the bank had granted loans not consistent with their stated purpose

Following the findings, EY had requested evidence of customers’ ability to service certain loans and proof of collateral, as well as their usage “in order to asses the recoverability of such loans”.

The bank announced that it had received a letter from EY tendering its resignation and stated that the bank and EY were unable to agree on “the extent of documents required” in relation to these loans – what it termed “the outstanding matters”.

The bank said it “has been working closely with EY” in order to provide the required information and “discussed with EY on various occasions about the proposed solutions to the outstanding matters with a view to complete the audit work as soon as possible”.

No solution was forthcoming however, and a consensus was not reached between EY and the bank on either the outstanding matters or a timetable for the completion of its audit.

“Accordingly, EY is unable to complete the audit procedures for the year ended 31 December 2018,” the bank said.

“As a matter of policy, we don’t comment on client matters,” an EY spokesperson said.

Crowe has been appointed as auditor to replace EY and “fill the casual vacancy” pending the conclusion of the 2018 AGM.

The bank said that an official appointment will be subject “completion of the audit engagement acceptance procedures which are now being conducted”.

The publication of the 2018 annual results is expected by the end of August this year.

The bank suspended trading in H shares and offshore preference shares on the Hong Kong Stock exchange pending the publication of its 2018 results.

Crowe has been contacted for comment.