China has asked state-owned firms to stop using Ernst & Young and other major global accounting firms over prolonged concerns of data security, Bloomberg reported on Wednesday. The Ministry of Finance is one department that has reportedly issued guidance, which advises firms to let contracts with PricewaterhouseCoopers, Ernst & Young, KPMG and Deloitte & Touche expire.
The guidance comes after Beijing agreed a deal with the U.S. last year to allow U.S auditors to inspect hundreds of New-York-listed Chinese firms.
Offshore firms are still allowed to use U.S. auditors but its parent companies are being instructed to use Chinese or Hong Kong accountancy firms, according to one source familiar with the matter.
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