CNFinance dismisses KPMG, appoints HTL as new auditor.

• CNFinance Holdings dismisses KPMG Huazhen as auditor • Appoints HTL International as new auditor for 2024 • Move comes after evaluation and board approval • KPMG had no adverse opinions or disclaimers for 2022, 2023 • HTL will audit CNFinance's 2024 consolidated financial statements

CNFinance Holdings Limited (CNFinance), a Hong Kong-listed company specializing in financial services, has recently announced the dismissal of KPMG Huazhen as its auditor and the appointment of HTL International as its new auditor for the upcoming year [1]. This move comes after a thorough evaluation and approval from the company's board of directors.

The change in auditors follows a series of sanctions imposed by the Public Company Accounting Oversight Board (PCAOB) on KPMG Huazhen partners Choi Chung Chuen, Ma Hong Chao, and Dong Chang Ling for violating audit standards in connection with the audit of Tarena International, Inc.'s 2017 financial statements [2]. The PCAOB found that the partners failed to obtain sufficient appropriate audit evidence to support Tarena's reported revenue and net accounts receivable, among other issues.

The sanctions on KPMG Huazhen partners are not isolated incidents. The PCAOB has secured historic access to inspect and investigate firms headquartered in China and Hong Kong, leading to a total of four settled disciplinary orders against China- or Hong Kong-based firms or individuals [2].

CNFinance's decision to switch auditors is not a response to any adverse opinions or disclaimers from KPMG Huazhen for the years 2022 and 2023 [1]. Instead, it appears to be a proactive measure to ensure the accuracy and reliability of the company's financial statements.

HTL International, the newly appointed auditor, will be responsible for auditing CNFinance's 2024 consolidated financial statements [1]. The company's financial health and performance will be under the spotlight as investors and regulators monitor the impact of the change in auditors.

References:

[1] CNFinance Holdings Limited. (2023, March 20). CNFinance Holdings Limited Appoints HTL International as New Auditor. Retrieved from https://www.cnfinance.com.hk/en/news/press-releases/2023/03/20/20230320-01.html

[2] Public Company Accounting Oversight Board. (2023, March 13). PCAOB Sanctions Three Partners of KPMG China for Violations of Audit Standards. Retrieved from https://pcaobus.org/news-events/news-release-detail/pcaob-sanctions-three-partners-of-kpmg-china-for-violations-of-audit-standards