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Accounting and Financial Reporting Council
This episode will present a case study, providing various clues for you to follow audit partner Mr. P and his team as they seek to solve the mystery Video AFRC Regional Regulatory Forum 2025 Highlights The RRF 2025 fostered high-level discussions on global issues affecting financial reporting and auditing—such as governance, audit quality, sustainability disclosures and assurance, and AI transformation. ... The AFRC also conducts policy research to enhance financial reporting and audit quality, and issues guidance on governance and related matters where appropriate. ... Inspection Inspections are conducted to monitor and enhance audit quality by assessing firms’ audit practices, quality management systems, and compliance with anti-money laundering and counter-terrorist financing requirements.
Accounting and Financial Reporting Council
This episode will present a case study, providing various clues for you to follow audit partner Mr. P and his team as they seek to solve the mystery Video AFRC Regional Regulatory Forum 2025 Highlights The RRF 2025 fostered high-level discussions on global issues affecting financial reporting and auditing—such as governance, audit quality, sustainability disclosures and assurance, and AI transformation. ... The AFRC also conducts policy research to enhance financial reporting and audit quality, and issues guidance on governance and related matters where appropriate. ... Inspection Inspections are conducted to monitor and enhance audit quality by assessing firms’ audit practices, quality management systems, and compliance with anti-money laundering and counter-terrorist financing requirements.
AFRC expects active cooperation and full compliance by PIE auditors with the AFRC Ordinance and their self-reporting of critical incidents in a timely manner
AFRC expects active cooperation and full compliance by PIE auditors with the AFRC Ordinance and their self-reporting of critical incidents in a timely manner 7 December 2023 The Accounting and Financial Reporting Council ( AFRC ) reiterates, as the independent regulator of the accounting profession in Hong Kong, that it expects all PIE auditors and registered responsible persons to fully comply with the Accounting and Financial Reporting Council Ordinance ( AFRCO ) and report to the AFRC in a timely manner any critical incidents in relation to audit quality and the firms’ systems of quality management. ... By so doing, the AFRC ensures financial reporting and audit quality and the integrity of those involved, thereby promoting investor confidence, protecting the public interest and safeguarding Hong Kong’s position as a leading international financial centre. ... I am confident that a compliance culture is conducive to better control and high quality for firms and their engagements respectively.”
AFRC issues 2022 Annual Investigation and Compliance Report
We urge auditors to pay attention to these key findings and observations and take actions to address them so as to improve audit quality. The board and management of listed entities and audit committees should seriously consider our findings and recommendations to ensure that high-quality financial reporting is upheld.” ... The AFRC identified the following most common areas of auditing irregularities: i) deficient engagement quality control review in respect of significant judgments made and conclusions reached by the engagement team (87%); ii) failing to obtain sufficient appropriate audit evidence on which to base the audit opinion (80%); iii) lack of professional skepticism and appropriate professional judgment (68%); and iv) insufficient evaluation of the reasonableness of complex accounting estimates (47%) and the adequacy of work performed by the auditor’s expert (23%). ... This is one of the many ways that the AFRC creates positive ripple impacts in upholding the quality of financial reporting and audits, based on which public confidence in the integrity of the financial market is enhanced.”
AFRC imposes its first ever permanent non-issuance of practising certificate order and pecuniary penalty of HK$300,000 against Chan Kam Kwan for serious CPA misconduct
Ms Leung added, “A sound system of quality management is crucial for consistent performance of high quality audits and ensures compliance with professional standards for large and small firms alike. When establishing policies and procedures in respect of engagement performance, practitioners are encouraged to consider and take benefit of the appropriate use of tools such as programmes and checklists to ensure adherence to standards and audit quality, without which a firm may be put at relatively higher risk of non-compliance.” ... There was a lack of an adequate and effective quality control system which is fundamental to the audit quality of engagements performed by an audit firm.
Press Releases
Press Releases AFRC welcomes and supports the Government consultation on proposal for legislation under Article 23 of the Basic Law 5 February 2024 AFRC highlights the importance of continuous professional development in ensuring audit quality and managing talent 8 January 2024 Audit Focus for 2023 year-end audit 22 December 2023 AFRC starts inspecting engagements involving audit working papers located on the Mainland 15 December 2023 AFRC expects active cooperation and full compliance by PIE auditors with the AFRC Ordinance and their self-reporting of critical incidents in a timely manner 7 December 2023 AFRC publishes Inspection Insights and an explanatory video on the inspection of non-PIE practice units to drive continuous improvements in audit quality 30 November 2023
AFRC reminds PIE auditors to be prepared for undertaking PIE engagements
In the reminder, the AFRC reiterates its expectations for PIE auditors to: demonstrate a genuine intention to undertake PIE engagements; understand and comply with the more stringent regulatory requirements for PIE auditors to deliver high-quality audits; and allocate sufficient resources to audit engagements, establish an effective system of quality management, and enhance the audit team’s competence and capacity through continuing professional development. Upholding the highest standard of audit quality is the responsibility of PIE auditors who play a vital role in protecting the public interest. The AFRC is committed to supporting the healthy development of the accounting profession and fostering an environment for capable PIE auditors to undertake listed company audits. The AFRC is confident that this reminder will benefit PIE auditors who would leverage on our reminder to enhance their capability to deliver high-quality audits.
Press Releases
Press Releases AFRC’s Response to PricewaterhouseCoopers Whistle-blower Allegations 10 July 2024 AFRC analyses trading suspensions of listed entities due to delays in preliminary annual results announcements and calls for continued efforts to uphold high-quality audits and financial reporting 5 July 2024 AFRC reminds PIE auditors to be prepared for undertaking PIE engagements 28 June 2024 AFRC emphasises the importance of leadership setting the right tone at the top 27 June 2024 AFRC calls for concerted efforts to improve the quality of financial reporting and audit in Hong Kong 13 June 2024 AFRC reminds auditors of the importance of audit documentation integrity 29 May 2024