The Economist has a summary of the situation Deloitte is tangled in regarding their audit of Longtop, a Chinese company that had some problems.
Article is here: Chinese Stall
Condensed thumbnail version in 75 words:
Deloitte noticed something odd in the books. Inquiries about said oddities resulted in Longtop seizing Deloitte’s workpapers and refusing to return them. Deloitte resigned. NYSE delisted Longtop. SEC wants to see the workpapers. Deloitte refused because Chinese secrecy law prohibit release of the workpapers. Now Deloitte is caught between a rock (SEC & PCAOB) and a hard place (Chinese secrecy laws, which as a totally wild guess probably have enforcement consequences that include jail time).
Check out the article. It is the shortest, clearest summary I’ve seen.