Thursday, September 07, 2017

What do auditors know about HNA? - Paul Gillis

Paul Gillis
Beida accounting professor Paul Gillis points at his weblog at the rumor Goldman Sachs has decided to suspend work on a HNA subsidiary IPO in the US, because they are unable to get enough information on this Chinese conglomerate. Gillis wonders what auditor PwC knows about their client.

Paul Gillis:
There is a shocking report that Goldman Sachs has suspended its work on HNA’s planned US IPO of subsidiary Pactera because it was unable to meet the bank’s internal “know your customer checks”.  HNA has been criticized for its opaque ownership structure, but it is surprising that Goldman Sachs could not get a look under the sheets. 
Bank of America Merrill Lynch, Citigroup and Morgan Stanley were reported earlier to have dropped HNA because of concerns over completing know your customer checks. 
HNA’s public companies are audited by PwC. This raises the question of how PwC is able to continue as auditor. Auditing standards require auditors to annually assess whether to continue a relationship with a client.
More at the ChinaAccountingBlog.

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