Chinese authorities said PwC knew of “material misstatements” in Evergrande’s financial statements when it audited them.
Accordingly, China’s Ministry of Finance imposed “administrative penalties” and suspended operations of PwC’s audit business, PwC Zhongtian, for six months.
Other PwC businesses that provide non-audit services in China are not affected.
Additionally, China’s securities regulator has confiscated and fined PwC for the profits it earned while auditing Evergrande.
The regulator’s investigation found that PwC had “seriously undermined the foundations of law and integrity and harmed the interests of investors”.
PwC said it had taken “a number of accountability and corrective actions” in response to the penalties, including dismissing six partners and beginning the process of fining responsible team leaders.
Five more staff have left, and PwC’s global risk and compliance head, Hemione Hudson, has been parachuted in to lead the China business on an interim basis.
PwC admitted its work on Evergrande fell “far short” of the standards the company expected.
“This is not representative of what we stand for as a network and has no place at PwC,” said Mohamed Kande, PwC’s global chairman.
“So we conducted a thorough investigation and took steps to hold those responsible accountable.
He added: “I have confidence in our Chinese partners and employees as we work together to restore trust with our stakeholders.”
“We deeply regret and apologize for the impact this has had on our customers and people. We will continue to work hard to restore our customers’ trust,” PwC China said in a statement.
Evergrande, which had built properties in more than 280 cities in China and expanded into other business sectors, faltered and finally went into liquidation in January.
Chinese authorities have fined and banned Evergrande and its founder Hui Ka-yan after accusing them of falsely inflating the company’s profits by $78bn (£61.6bn).
