Longtop's auditor quits amid financial irregularities

Deloitte, the auditor of US-listed Chinese firm Longtop Financial Technologies, resigned as the company comes under greater scrutiny by US regulators, Reuters reported. Longtop said that the auditing firm quit in part due to “recently identified falsity” in the company’s financial records, and “deliberate interference” from management during the auditing process, which meant that Deloitte could not rely on the veracity of its previous audits. Longtop’s CFO, Derek Palaschuk, offered to resign last week. Trading at the firm was frozen on May 17, after its value had fallen by half since November 2010. The US Securities and Exchange Commission has opened an inquiry into Longtop’s financial statements. The company’s troubles come in the wake of a broader regulatory inquiry into US-listed Chinese firms with questionable financial statements.