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Completed enquiry and investigations
In relation to the above accounting issue, the FRC had also adopted two investigation reports on the respective audits of the Relevant Financial Statements by two auditors on 8 November 2018 and 4 February 2020. ... The FRC resolved not to require the listed entity to retrospectively correct the non-compliance identified above. Auditing irregularities As a result of the investigations, in relation to the above issues, it was found that: the auditor of the 2012 Financial Statements was in breach of: Hong Kong Standard on Auditing ( HKSA ) 200 (Clarified) Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing ( HKSA 200 ); HKSA 230 (Clarified) Audit Documentation ( HKSA 230 ); HKSA 500 (Clarified) Audit Evidence ( HKSA 500 ); HKSA 540 (Clarified) Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures ( HKSA 540 ); and HKSA 560 (Clarified) Subsequent Events . the auditor and the engagement partner of the 2013 Financial Statements were in breach of: HKSA 200; HKSA 230; HKSA 260 (Clarified) Communication with Those Charged with Governance; HKSA 450 (Clarified) Evaluation of Misstatements Identified during the Audit; HKSA 500; HKSA 510 (Clarified) Initial Audit Engagements – Opening Balances; and HKSA 540 the engagement quality control reviewer of the 2013 Financial Statements was in breach of HKSA 220 (Clarified) Quality Control for an Audit of Financial Statements to carry out an objective engagement quality control review.
AFRC emphasises the importance of leadership setting the right tone at the top
AFRC emphasises the importance of leadership setting the right tone at the top 27 June 2024 The Accounting and Financial Reporting Council ( AFRC ) today publishes an article titled Setting and Reinforcing Tone at the Top to Achieve Quality Audits , emphasising the importance of an audit firm’s leadership in setting and reinforcing a tone at the top that fosters a culture of ethical behaviour, integrity, and commitment to audit quality. The article explains the importance of tone at the top in establishing and sustaining an ethical, compliance-oriented, and quality-focused culture to minimise illegal or unethical activities in an audit firm, thereby promoting audit quality and fostering talent development. ... Ensure compensation is duly tied to performance in upholding audit quality. Audit committees should set a right tone at the top to: Prioritise audit quality during auditor selection and reappointment.
Resources
Resources 【Audit Uncovered】EP1 Seeing Auditing Through a New Lens Video 【Audit Uncovered】EP1 Seeing Auditing Through a New Lens Through this video, we hope to take you deeper into how audit reports help assess the reliability of financial information, identify significant risks, and build investor confidence. ... More 【AFRC Connect】EP3 Revealing the Hidden Truths of Management Fraud: The Vital Role of Journal Entry Testing Showing 1 - 12 of 13 items Choose Resource Type All Resources Types Infographic Video Video Building Trust Together: Stakeholder Voices on Sustainability Assurance 10 March 2026 Building Trust Together: Stakeholder Voices on Sustainability Assurance Video Report Digest - Navigating the 2025 Year-End Audit - Key Reminders for Auditors 3 February 2026 Report Digest - Navigating the 2025 Year-End Audit - Key Reminders for Auditors Video Your Voice Matters: AFRC's Consultation on Proposed Sustainability Assurance Framework 13 January 2026 Your Voice Matters: AFRC's Consultation on Proposed Sustainability Assurance Framework Video AFRC Chairman's Message on Proposed Regulatory Framework for Sustainability Assurance in Hong Kong 2 January 2026 AFRC Chairman's Message on Proposed Regulatory Framework for Sustainability Assurance in Hong Kong Video AFRC Regional Regulatory Forum 2025 Highlights 20 November 2025 AFRC Regional Regulatory Forum 2025 Highlights Video 【Audit Uncovered】EP1 Seeing Auditing Through a New Lens 29 October 2025 【Audit Uncovered】EP1 Seeing Auditing Through a New Lens Video 【AFRC Connect】EP3 Revealing the Hidden Truths of Management Fraud: The Vital Role of Journal Entry Testing 11 August 2025 【AFRC Connect】EP3 Revealing the Hidden Truths of Management Fraud: The Vital Role of Journal Entry Testing Infographic Audit Focus Insights For Auditors on 2025 Year-End Audits 22 May 2025 Audit Focus Insights For Auditors on 2025 Year-End Audits Video 【AFRC Connect】EP2 Understand and Evaluate IT Risks and Controls 14 April 2025 【AFRC Connect】EP2 Understand and Evaluate IT Risks and Controls Video AFRC CEO Discusses Regulatory Functions and Audit Quality 10 April 2025 AFRC CEO Discusses Regulatory Functions and Audit Quality Video 【AFRC Report Digest】Reminders for 2024/25 Year-End Audits (Chinese Version Only) 4 March 2025 【AFRC Report Digest】Reminders for 2024/25 Year-End Audits (Chinese Version Only) Video 【AFRC Connect】EP1 How Important is Audit Risk Assessment? 4 February 2025 【AFRC Connect】EP1 How Important is Audit Risk Assessment?
The Financial Reporting Council e-newsletter (February 2020) issue gives insights and advice to the audit profession amidst challenging financial and socio-economic situations
Highlights of the e-newsletter: Audit quality and audit independence are even more important and vulnerable amidst the challenging financial and socio-economic situations. The FRC has engaged in constant dialogue with stakeholders to understand the challenges and worked closely with other regulators to explore how audit quality and audit independence will not be compromised. ... This should help ensure that audit quality would not be compromised.
AFRC Study Advocates for Improved Sustainability Assurance Practices and Urges Auditors to Incorporate Climate Risks in Financial Audits
PIE auditors are making progress to assess and address climate risks in financial audits. Auditors are required to assess the financial impact of climate-related risks when auditing financial statements. Category A auditors, 3 who serve clients in climatesensitive industries, are leading the way in addressing climate-related risks in financial audits. They set a high standard by providing ESG training and having ESG specialists support their financial audit teams. ... The analysis was based on the assurance reports published by the entities in 2023 and 2024. 2 These PIE auditors have at least one PIE audit engagement as of 30 April 2024. 3 Category A PIE auditors have more than 100 PIE audit engagements.
Financial Reporting Council welcomes the consultation conclusions on proposed rule changes relating to disclaimer or adverse audit opinion on issuer’s financial statements published by The Stock Exchange of Hong Kong Limited
The FRC firmly believes that high quality auditing by auditors and reliable financial reporting by issuers combined play a pivotal role in protecting investor’s interest. ... At the same time, listed issuers are encouraged to resolve audit issues on a timely basis.” ... We believe that the quality of financial reporting of listed entities in Hong Kong would be further enhanced when the Financial Reporting Council (Amendment) Ordinance and the proposed amendments of the listing rules by the Exchange take effect.”
Resources
Resources 【Audit Uncovered】EP1 Seeing Auditing Through a New Lens Video 【Audit Uncovered】EP1 Seeing Auditing Through a New Lens Through this video, we hope to take you deeper into how audit reports help assess the reliability of financial information, identify significant risks, and build investor confidence. Let us break it down together: what exactly does an audit do, and how does it provide reasonable assurance while becoming an indispensable part of the financial ecosystem? More 【Audit Uncovered】EP1 Seeing Auditing Through a New Lens 【AFRC Connect】EP3 Revealing the Hidden Truths of Management Fraud: The Vital Role of Journal Entry Testing Video 【AFRC Connect】EP3 Revealing the Hidden Truths of Management Fraud: The Vital Role of Journal Entry Testing In this episode, we explore how Journal Entry Testing (JET) can detect management's "financial makeup tricks".
FRC completes second investigation with working papers obtained under MoU with the Supervision and Evaluation Bureau of the PRC Ministry of Finance
As a result, the engagement quality control reviewer also did not identify the material misstatement. ... HKSA 220 Quality Control for an Audit of Financial Statements prescribes the performance by an engagement quality control reviewer of an objective evaluation of significant judgements made by the engagement team, and the conclusion reached in formulating the auditor’s report. ... Our purpose in reporting publicly The FRC announces the adoption of reports on audit investigations and enquiries into financial reporting of listed entities: (a) to promote continuous improvement in the quality of auditing and financial reporting by all our regulatees; (b) to encourage audit committee members to consider the implications of our findings for the financial reporting and audits of their own listed entities; and (c) to maintain public confidence in the system for independent auditor regulation.