Auditors of Chinese companies listed in the United States say that bad IPOs are not their fault, following an investigation by regulators for false accounting, reports the South China Morning Post.
The U.S. Securities and Exchange Commission is also investigating investment banks and accountants that helped the companies list in US stock exchanges, as well as lawyers and stock promoters.
"The environment is only getting tougher. But who caused this? It is not the auditors or the bankers. It is the companies who are committing fraud," says George Qin, a partner from Texan accountancy Malone Bailey, which specialises in auditing small Chinese companies. "When the bank statements are falsified, because bank employees are providing customers with false statements, there is not much an auditor can do."
In an interview with the Post, John Fletcher, a managing director at small US investment bank Brean Murray Carret & Co, which also specialises in working for small mainland companies, blamed mainland companies for their own accounting scandals.
"Chinese companies sometimes do not want to spend the money on good accounting and transparency. Good CFOs cost up to US$200,000 a year. Getting proper accounting systems in place costs money. Proper transparency costs money," Fletcher told the Post.
MORE ARTICLES ON ACCOUNTING FRAUD