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The Securities and Exchange Commission has begun administrative proceedings against the China affiliates of each of the Big Four accounting firms and also of BDO. The action was taken for the firms' refusal to produce audit work papers and other documents related to China-based companies under investigation by the SEC for potential accounting fraud against U.S. investors.

The five firms are BDO China Dahua Co. Ltd; Deloitte Touche Tohmatsu Certified Public Accountants Ltd; Ernst & Young Hua Ming LLP; KPMG Huazhen (Special General Partnership); and PricewaterhouseCoopers Zhong Tian CPAs Limited. Audit materials are being sought in an investigation into potential wrongdoing by nine China-based companies whose stock trades in American securities markets.

An administrative law judge will schedule a hearing to determine appropriate sanction against the firms. Under the SEC order, the judge must issue an initial decision no later than 300 days from the date of service of the order.

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