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The AFRC has sanctioned BOFA CPA Limited (BOFA) for improperly backdating audit working papers in two audit engagements. 

The disciplinary action arises from an AFRC inspection that concluded in 2024, which covered BOFA’s audits of the consolidated financial statements of a listed company and the financial statements of a licensed corporation, with audit reports issued in March 2022 and July 2022 respectively.  Among other issues identified during the inspection, the AFRC observed that the audit working papers for both audit engagements included audit programmes that were sourced from the 2022 edition of the Audit Practice Manual, issued by the Hong Kong Institute of Certified Public Accountants in September 2022 after the respective audit report issuance and file assembly dates.  It is undisputed that these audit programmes were created after the audit file assembly dates, but were backdated (and signed) to various dates prior to the issuance of the respective audit reports.

The AFRC considered that the backdated nature of these programmes created a misleading impression that they had been prepared and reviewed by the engagement team during the course of the audits, even though they were in fact created after the audit file assembly dates.  As a result, BOFA’s practice fell short of the fundamental principle of integrity as set out in the Code of Ethics for Professional Accountants, and breached the requirements of Hong Kong Standard on Auditing 230 – Audit Documentation.

The AFRC has reprimanded BOFA and imposed a pecuniary penalty of HK$175,000.  The investigation into the relevant engagement partner is currently underway.

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