Deloitte, one of the world’s Big Four accounting firms, has recently been involved in a storm of irregularities. Pictured is the logo outside the firm’s office in London, Sept. 25, 2017.
Deloitte & Touche, one of the world’s Big Four accounting firms, has been reported by employees for irregularities in the audit process of a number of listed companies, involving a number of listed companies such as Red, Yellow and Blue.
Caijing.com, interface news and other land media reported that on the evening of February 3, a group of Deloitte Beijing employees, calling themselves YW, sent a group of more than 50 pages of PowerPoint documents to the company’s mailbox, reporting his non-compliance with the company’s people and events during his four years of work. The document was dated December 31, 2020.
On February 5, Deloitte replied to several land media that Deloitte is meeting internally and verifying the content of the reporting PPT, and the department that speaks out externally is also meeting.
YW employees said that Deloitte management and RRG (Deloitte Reputation and Integrated Risk Management) had overstepped the bottom line of audit ethics, and as a member of the audit profession, they had the obligation to bring the truth to the public.
YW reported directly and relayed others’ reports that Deloitte “let the airplane out of the bag” during the audit process from 2016 to 2018 (referring to drawing conclusions directly without looking at relevant supporting documents) and wrote audit procedures without supporting sample checks, etc.
YW’s report involved senior managers, senior auditors and even partners at Deloitte. The companies involved include China Boqi Environmental Protection (Holdings) Co. and Sinotrans Shandong Co. as well as the previously scandalous Red Yellow Blue Educational Institution, which is listed on the New York Stock Exchange in the United States.
In November 2017, it was reported that the Red Yellow Blue Kindergarten (Xintiandi Branch) in Guanzhuang, Chaoyang District, Beijing, a subsidiary of Red Yellow Blue Education Group, was exposed to child molestation and abuse, not only by giving injections and feeding drugs to children, but also by molesting children. The incident sparked public outrage among mainland netizens at the Time.
YW reported that in the 2016 annual audit, Boqi Environmental’s project found widespread inventory impairment problems during the audit monitoring in Yangcheng, Shanxi, and that many inventories had reached the impairment standard, but Deloitte manager Zhu Xiaobin did not believe these things and refused to make impairment provisions, and also sent someone to re-monitor the inventory to cover up the problem and come up with the inventory “no abnormal ” report.
In Sinotrans’ 2016 annual audit, the head of the audit, Wu Mengzhi, asked the whistleblower to send a sample of the draw voucher directly to Sinotrans Yantai’s finance staff and have them fill out the information and send it back, even if the audit process was completed. The person in charge also requested that the matter could only be said by phone and no emails could be sent to leave evidence.
In the 2017 audit of Red Yellow Blue Education Institution, there were discrepancies between the date, amount and actual vouchers in many places of the draft, but the auditor said “just fill in whatever you want”, and abetted the whistleblower to write randomly. The company has also sent tens of thousands of dollars of beauty cards to project partners and increased audit fees in order to allow Deloitte to cover up these problems.
It is reported that accountant audit refers to the independent economic supervision activities of pre and post review of major projects and financial income and expenditure of the government and financial institutions, enterprises and organizations at all levels of the state by a dedicated authority in accordance with the law.
The incident of Deloitte being reported by its employees has caused a wide range of repercussions on the mainland internet, and the word of this matter once ranked the second place on the mainland microblogging hot search list.
A netizen said, “Note to all, audit is supervision, then that means if the auditors are not compliant, the melon behind this is even bigger.” “Take the customer’s money but also to give the customer to pick a thorn in the side, how can this be independent well, the customer still want.”
Another netizen said, “I hope the whistleblower himself is well. There is a dark side in every industry, and it is courageous to come forward.” “If the content of the report is true, I have only one idea: do not let the people who raised the issue become the ‘problem’, do not let the people who dare to speak the truth with their conscience chill and despair.”
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