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AFRC reprimands and fines Deloitte and two engagement partners over HK$1.9 million for multiple audit deficiencies in relation to two companies formerly listed in Hong Kong
In the audits of both companies formerly listed in Hong Kong, the AFRC identified multiple deficiencies in the audit procedures concerning revenue recognition and external confirmations. ... Deficiencies in the audit work could undermine public confidence in the audit quality; Deloitte’s history of non-compliance with the Hong Kong Institute of Certified Public Accountants as at the time of the misconduct; the clean disciplinary records of Wong and Mak; and the Regulatees’ cooperation with the AFRC, acceptance of the AFRC’s findings and disciplinary action, which facilitated an early resolution of the matter. ... Further, the use of external confirmations is a critical audit procedure for verifying the financial information provided by the audited entity.
Events
AFRC x Cyberport: AI Applications for the Accounting & Audit Profession Regional Regulatory Forum 2025 Regional Regulatory Forum 2024 AFRC x Cyberport: AI Applications for the Accounting & Audit Profession Explore More Regional Regulatory Forum 2025 Explore More Regional Regulatory Forum 2024 Explore More
FRC Investigates Going Concern Reporting of China Evergrande
FRC Investigates Going Concern Reporting of China Evergrande 15 October 2021 The FRC has today initiated: (1) An enquiry into the financial statements of China Evergrande Group ( China Evergrande ) for both the year ended 31 December 2020 ( 2020 Annual Accounts ) and the six months ended 30 June 2021 ( 2021 Interim Accounts ); and (2) An investigation of the audit carried out by PricewaterhouseCoopers ( PwC ) on the 2020 Annual Accounts ( 2020 Audit ). ... We also received a complaint from a member of the public on these matters in relation to the 2020 Annual Accounts and 2020 Audit. 2020 Annual Accounts In the 2020 Annual Accounts, China Evergrande referred to: (i). ... Made no explicit statement in the 2020 Annual Accounts as to whether material going concern uncertainties existed before or after the effects of implementing the mitigating plans. 2020 Audit PwC expressed an unmodified audit opinion in its auditor’s report on the 2020 Annual Accounts but made no reference to going concern material uncertainties. 2021 Interim Accounts In the 2021 Interim Accounts, China Evergrande: (i).
Reports
Reports Policy and Governance Reminder to PIE auditors: Be Prepared for Undertaking PIE Engagements Audit Quality Management System 28 June 2024 Policy and Governance Setting and Reinforcing Tone at the Top to Achieve Quality Audits Audit Corporate Governance Quality Management System 27 June 2024 Policy and Governance Roundtable Discussion on Audit Quality and Climate-integrated Audits in Hong Kong Audit Auditor Changes Corporate Governance Financial Reporting Sustainability Assurance 13 June 2024 Policy and Governance The Importance of Audit Documentation Integrity Audit Quality Management System 29 May 2024 Policy and Governance Report on the Analysis of the Public Interest Entity Audit Market in Hong Kong Audit Corporate Governance Financial Reporting Quality Management System Technology 27 March 2024 Policy and Governance Continuing Professional Development as a Key to Improving Audit Quality in Hong Kong Audit 8 January 2024 Inspection Audit Focus: 2023 Financial Year-end Audit Reminder Audit Corporate Governance Quality Management System 22 December 2023 Inspection Inspection Insights Audit Quality Management System 30 November 2023 Oversight 2023 Oversight Report on HKICPA’s Performance of Specified Functions Audit Financial Reporting 20 November 2023 Policy and Governance AFRC Addresses Concerns Surrounding Auditor Changes Audit Auditor Changes 28 September 2023 Investigation and Compliance 2023 Annual Investigation and Compliance Report Audit Financial Reporting 4 September 2023 Inspection Audit Focus: Effective Planning - The Key to High-Quality Audits Audit Corporate Governance 31 July 2023
AFRC advocates the value of transparency reports in driving trust and market confidence
Communicating commitment and measures to uphold audit quality High-quality audits are the result of deliberate and sustained investment by audit firms in people, principles, and processes. ... Disclosing these measures also provides audit partners and staff with a clearer understanding of how audit quality expectations are set and reinforced. ... By making the drivers of audit quality visible, audit firms signal their leadership and strengthen public confidence in audits.
Reports
Reports Inspection Checkpoint - Reminders for Auditors’ Reporting on Licensed Corporations Audit 28 March 2025 Policy and Governance Market Readiness for Sustainability Reporting and Assurance in Hong Kong Corporate Governance Sustainability Assurance 27 January 2025 Inspection Checkpoint – Obtaining an Understanding of the Audit Clients’ IT Environments Audit Technology 24 January 2025 Inspection Inspection Insights – Root Cause Analysis and Remediation: A Call to Action for Quality Improvement Audit Quality Management System 1 December 2024 Inspection Overview of the Non-Public Interest Entity Audit Market in Hong Kong Audit Quality Management System 30 October 2024 Policy and Governance Audit Implications of Current Economic Conditions for Hong Kong-listed Companies Audit Auditor Changes Corporate Governance Sustainability Assurance 21 October 2024 Inspection Audit Focus: 2024 year-end audits Audit Corporate Governance Quality Management System 9 October 2024 Policy and Governance Safeguarding Auditor Independence: Concerns Surrounding Procurement and Purchases from Audit Clients Audit Corporate Governance Quality Management System 4 October 2024 Oversight 2024 Oversight Report on HKICPA’s Performance of Specified Functions Audit Financial Reporting 16 September 2024 Investigation and Compliance 2024 Annual Investigation and Compliance Report Audit Financial Reporting 28 August 2024 Inspection 2023 Annual Inspection Report Audit Corporate Governance Quality Management System 11 July 2024 Inspection Analysis of Listed Entities Suspended from Trading Due to Delay of Preliminary Annual Results Announcement Audit Auditor Changes Corporate Governance Quality Management System 5 July 2024
Reports
Reports Inspection 2022 Annual Inspection Report Audit Corporate Governance Quality Management System 11 July 2023 Policy and Governance 2023 Survey Report on the Implementation of Guidelines for Effective Audit Committees – Selection, Appointment and Reappointment of Auditors Audit Auditor Changes Corporate Governance 24 March 2023 Policy and Governance Audit Fees Paid by Listed Companies in Hong Kong in 2020/2021 Audit Auditor Changes Corporate Governance Financial Reporting 24 March 2023 Inspection Follow-up Open Letter on Auditor Changes Audit Auditor Changes Corporate Governance 11 January 2023 Inspection Audit Focus: 2022 financial year-end audits reminders Audit Auditor Changes Quality Management System 22 December 2022 Oversight 2022 Oversight Report on HKICPA’s Performance of the Specified Functions Audit Financial Reporting 15 November 2022 Inspection 2022 Interim Inspection Report Audit Quality Management System 15 November 2022 Inspection New and revised quality management standards follow-up survey on implementation progress by PIE Auditors Quality Management System 10 November 2022 Inspection Open letter regarding late auditor resignations Auditor Changes 27 October 2022 Investigation and Compliance 2022 Annual Investigation and Compliance Report Audit Financial Reporting 20 October 2022 Inspection 2021 Annual Inspection Report Audit Quality Management System 23 June 2022 Inspection An External Auditor’s Guide to Performing Root Cause Analysis Audit Quality Management System 17 June 2022
Reports
Reports Inspection New and revised quality management standards Survey on implementation progress by PIE Auditors Quality Management System 31 March 2022 Oversight Report on the FRC's Assessment of HKICPA's Performance of the Specified Functions Audit Financial Reporting 16 December 2021 Investigation and Compliance 2021 Annual Investigation and Compliance Report Audit Financial Reporting 3 November 2021 Inspection 2021 Interim Inspection Report Audit Quality Management System 3 November 2021 Inspection 2020 Annual Inspection Report Audit Quality Management System 3 June 2021 Policy and Governance Report on Overview of the Market for Listed Entity Audits in Hong Kong Audit Auditor Changes Corporate Governance 11 March 2021 Inspection 2020 Interim Inspection Report Audit Quality Management System 11 December 2020 Oversight Report on the FRC’s Assessment of the HKICPA’s Performance of the Specified Functions Audit Financial Reporting 11 December 2020 Oversight Abridged Report on the FRC’s Assessment of the HKICPA’s Performance of the Specified Functions Audit Financial Reporting 11 December 2020