Jing Ji Wang·2025-12-18 02:08Core Viewpoint - The cancellation of Yongtuo Accounting Firm's qualification to provide securities services has significant implications for the firm and the market, leading to a wave of client changes and potential industry shifts [2][3][5]. Group 1: Regulatory Actions - On December 16, the Ministry of Finance and the China Securities Regulatory Commission (CSRC) announced the cancellation of Yongtuo Accounting Firm's registration for securities services due to serious deficiencies in its audit work [2][3]. - The firm was found to have engaged in fraudulent activities during audits for several listed companies, including fabricating audit adjustments and altering financial statements [5]. Group 2: Market Reactions - Following the regulatory actions, approximately 20 listed companies have initiated the process to change their auditing firms this year, with 9 of these changes occurring in December alone [2][6]. - Two of Yongtuo's clients, *ST Shengxun and *ST Jingang, announced their decision to switch to new auditing firms on December 15 [6]. Group 3: Financial Impact - Yongtuo Accounting Firm, which had a total revenue of 323 million yuan in 2024, generated 131 million yuan from its securities business [6]. - The firm faced a penalty of 65.283 million yuan and was banned from providing securities services, with several of its registered accountants also facing fines and lifetime bans [5]. Group 4: Industry Dynamics - A total of 12 other accounting firms have begun to take over Yongtuo's clients, with Zhongshen Zhonghuan Accounting Firm taking the most, acquiring 6 clients [7]. - The firm has experienced a significant reduction in its workforce, with a decrease of nearly 16% in registered accountants, impacting its operational capacity [7].