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AFRC reprimands Prism Hong Kong Limited, Kyaw Sai Hong and Yam Wai Man for conducting PIE engagements without the required registrations and imposes pecuniary penalties totalling HK$353,500
According to sections 20D, 20E and 20V of the AFRCO, a registered PIE auditor must not authorise any person who is not its registered engagement partner or its registered engagement quality control reviewer to carry out any activities in such capacities, and any individual who is to act as an engagement partner or an engagement quality control reviewer for a PIE engagement carried out by a registered PIE auditor must be a registered engagement partner or a registered engagement quality control reviewer of the registered PIE auditor concerned, before undertaking any activities in such capacities. Kyaw and Yam were not (and are not) a registered engagement partner or registered engagement quality control reviewer of Prism. However, in 2023, Prism, as the auditor in seven PIE engagements, authorised Kyaw to act as the engagement partner or engagement quality control reviewer in six of those audit engagements, and authorised Yam to act as the engagement quality control reviewer in one of those audit engagements, and Kyaw and Yam acted in such capacities without the required registrations.
Financial Reporting Council publishes Guideline on notification of changes in auditor appointments
The FRC consulted with a cross-section of firms in Hong Kong and Mainland China, which audit PIEs and are subject to inspection, to explain the requirements and receive comments on them. ... Inspection is a critical part of the FRCs remit to monitor and improve audit quality. Receiving timely information directly from PIE auditors enhances our ability to determine the frequency and subject of inspections and to understand and consider the implications for audit quality, if any, of changes in appointment across the market for listed entity audits.”
FRC and The Exchange to strengthen collaboration
FRC and The Exchange to strengthen collaboration 8 June 2021 The Financial Reporting Council (FRC) and the Stock Exchange of Hong Kong Limited (the Exchange), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today signed a new Memorandum of Understanding (MoU) to further strengthen collaboration between the two organisations, in ensuring the upholding of quality financial reporting by listed entities and their auditors. ... The signing of this new MoU signals our closer cooperation between the Exchange and the FRC, and underscores our commitment to ensure the quality of financial reporting and audits of listed companies, helping to reinforce Hong Kong’s status as an international financial centre.” Mr Marek Grabowski, CEO of the FRC said, “The MoU establishes a joint, complementary, and collaborative framework for the FRC and the Exchange under which our collective regulatory efforts can better provide investors protection through high quality financial reporting.”
FRC signs Memorandum of Understanding with HKICPA
The FRC and the HKICPA share a common goal in improving audit quality and the standards of professional conduct of PIE auditors and of the accountancy profession in general. ... The HKICPA has long advocated audit quality and this MoU will contribute to the continuing development of the Hong Kong audit market. ... Enhanced information sharing and referrals will enable coordinated effort to achieve a robust regulatory regime that drives high quality financial reporting and auditing for listed entities.
AFRC issues 2024-25 Annual Report
During the reporting period, the AFRC issued 15 publications and conducted 54 stakeholder engagement activities, reaching over 25,500 stakeholders and raising awareness on critical issues related to audit quality, corporate governance, and regulatory compliance. The Report underscores the AFRC's commitment to advancing the accounting and audit profession through initiatives such as the first Regional Regulatory Forum, strengthened industry collaboration, a knowledge and guidance video series designed for small to medium practices, and timely guidance on emerging issues via various channels. ... We are committed to maintaining the highest standards of audit quality and financial reporting, thereby protecting stakeholder interests and reinforcing Hong Kong’s role as an international finance centre."
AFRC issues its 2022-23 Annual Report
The Report gives a detailed account of our progress and accomplishments in upholding audit quality and quality of financial reporting as well as promoting the sustainable development of the accounting profession. ... These include combating market misconduct, influencing the mindset and behaviour of our regulatees and educating the market of good practices in relation to audit, financial reporting and corporate governance.”
FRC Welcomes the Gazettal of the Commencement Notice of Financial Reporting Council (Amendment) Ordinance 2019
The new regime will not only enhance investor protection and strengthen investor confidence in corporate reporting and audit quality, it will also further strengthen Hong Kong’s reputation as a competitive international financial centre. The transformation into the new era would not have been possible without the staunch support from the HKSAR Government, Members of the Legislative Council and the audit profession. The FRC is well-prepared to embrace the new opportunities and challenges ahead.” ... We are also preparing our application for membership of the International Forum of Independent Audit Regulators whose members from around the world share their regulatory experience and inspection findings in order to enhance audit quality globally. ” For details of the Commencement Notice of the Financial Reporting Council Ordinance, please visit: https://www.gld.gov.hk/egazette/pdf/20192320/es22019232080.pdf For press release about the Commencement Notice, please visit: https://www.info.gov.hk/gia/general/201905/17/P2019051600615.htm?
AFRC suspends Lam Kin Choi for 2 years and fines him HK$300,000 for flagrant disregard of two statutory requirements in relation to inspections of two practice units
Lam’s non-cooperative behaviour precludes the AFRC from inspecting the two practice units, and therefore undermines its regulatory functions of monitoring and upholding audit quality. On 10 March 2023, the AFRC’s Inspection Department issued two statutory requirements ( Requirements ) for the provision of information and documents ( Required Documents ) of Lam’s two practice units (VenturePro CPA Limited ( VenturePro ) 1 and William Lam & Co. ( WLC ) 2 ) by 31 March 2023. 3 The Required Documents were necessary for the Inspection Department to conduct an inspection on the two practice units, in order to ascertain whether they had remediated the serious deficiencies as identified by the HKICPA during its practice review in July 2022. ... Such failures to cooperate are a very serious matter, as they prevented the AFRC from exercising its regulatory function of inspecting Lam’s practice units, thereby hampering its ability to monitor and uphold audit quality. To reflect the seriousness of Lam’s two counts of misconduct, the AFRC imposed the following sanctions against Lam: (i) public reprimand; (ii) pecuniary penalty of HK$300,000; 4 (iii) suspension of his HKICPA registration for two years; (iv) cancellation of his practising certificate; (v) two-year non-issuance of practising certificate order; and (vi) order for investigation costs and expenses of HK$50,214. ... The accounting profession is reminded to adopt an attitude of compliance and cooperation in order to facilitate the AFRC’s discharge of its regulatory duties to uphold audit quality, protect the public interest, and to promote public trust towards the quality of the accounting profession under the independent regulatory regime.”