Completed investigation

On 13 March 2019, the FRC adopted the investigation report on the audit of the consolidated financial statements of a listed entity for the year ended 31 December 2015.

The FRC found that the auditor, the engagement partner and the engagement quality control reviewer failed or neglected to observe, maintain or otherwise apply certain professional standards in the relevant audit in relation to an option to issue convertible bonds to a subscriber (Option) .

The investigation revealed that the auditor and the engagement partner failed to perform the relevant audit, in relation to the Option, in accordance with the relevant provisions of HKSA 200 (Clarified) Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing ; HKSA 500 (Clarified) Audit Evidence ; HKSA 540 (Clarified) Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures and HKSA 550 (Clarified) Related Parties .

It was also found that the engagement quality control reviewer of the relevant audit failed to comply with the relevant provisions of HKSA 220 (Clarified) Quality Control for an Audit of Financial Statements in relation to the quality control review .

The investigation report has been referred to the Hong Kong Institute of Certified Public Accountants to determine if any disciplinary actions are warranted. Names of the relevant parties are withheld because of the potential disciplinary proceedings.