(Yicai) June 14 -- Global accounting giants Ernst & Young and Klynveld Peat Marwick Goerdeler, as well as some Chinese-funded accounting firms, have secured most of the Chinese companies that dropped PricewaterhouseCoopers as auditor after its involvement in the China Evergrande Group's financial fraud scandal.

Twenty-eight of the 34 Chinese firms that already terminated their auditing contracts with PwC have already found new auditors, Yicai calculated.

China Life Insurance, People's Insurance Company Group of China, and six others chose EY. China Merchants Group, China Taiping Insurance Holdings, and five others choose KPMG. China Railway Group, Shanghai Pharmaceuticals Holding, and five others choose Deloitte Touche Tohmatsu. The remaining ones chose Chinese-funded accounting firms, such as ShineWing, BDO Shu Lun Pan Certified Public Accountants, Zhongxinghua CPAs, and Grant Thornton International.

A total of 34 Chinese companies have cut their ties with PwC and its affiliates in the wake of the financial scandal at Evergrande, which involved auditing fees of more than CNY460 million (USD63.4 million), according to Yicai calculations. Chinese authorities are investigating the accounting giant's work for the bankrupt developer.

However, there are still a few Chinese companies that renewed their contracts with PwC. Chinese cosmetics giant Jahwa United announced on June 5 that its auditing and risk management committee confirmed PwC's local unit PwC Zhong Tian as its auditor for this year, with related feeds of about CNY4 million (USD551,340).

The boards of shareholders of carrier China Telecom and courier SF Holding recently approved the proposals to renew PwC's contracts. The two firms spent CNY59 million and CNY18.5 million (USD8.1 million and USD2.6 million), respectively, in auditing fees last year.

On March 18, Evergrande's unit Evergrande Real Estate Group announced it had been administratively punished by the China Securities Regulatory Commission for inflating its revenue by over CNY560 billion (USD77.3 billion) in its 2019 and 2020 earnings reports. The CSRC fined the unit CNY4.2 billion (USD579.5 million).

Evergrande, which is now in liquidation, used PwC as its auditor for 14 years between 2009 and January last year. PwC issued unqualified opinions on the developer's annual reports from 2009 to 2020.

Editor: Futura Costaglione