The AFRC, as Hong Kong's independent regulator of the accounting profession, is entrusted with the statutory duty to initiate investigations into potential misconduct by PIE auditors, registered responsible persons, non-PIE auditors, and professional persons, referring substantiated cases to the Discipline Department for sanctions or escalation to other regulators or law enforcement agencies.
Investigation Process
The diagram below illustrates the overall investigation process:
The AFRC assesses information from various sources about potential misconduct or irregularities to determine whether to initiate an investigation under the AFRCO. An investigation is initiated if the evidence meets the relevant threshold.
During an investigation, the investigator may exercise powers under the AFRCO, requiring specified persons to produce relevant records and documents, provide information and explanations, attend interviews and answer questions, and give other appropriate assistance.
The investigator will prepare a written investigation report upon completion of the investigation and send a draft of the report to the regulatee and any other persons named in it, giving them a reasonable opportunity to be heard before submitting the final investigation report to the AFRC.
The AFRC may, after considering the investigation report, take one of the following actions:
- close the case without further action;
- take such other follow-up actions under the AFRCO as the AFRC considers appropriate; or
- impose a sanction on, or take an action in relation to, the regulatee investigated under the AFRCO.
For details, please refer to:
- Investigation Policy Statement for PIE Auditors, Non-PIE Auditors and Registered Responsible Persons
- Investigation Policy Statement for Professional Persons
- Investigation Policy Statement (in relation to audits or the preparation of specified reports completed for listed entities before 1 October 2019).