Search

AFRC 2022 Annual Inspection Report provides transparency about audit quality and holds firms accountable for their performance

We saw a progressive improvement in audit quality, mainly in Category A ( Cat A ) firms. ... This is a loud and clear message that those firms without substantial improvement in audit quality rating during the 202022 Cycle, should immediately sharpen its focus on improving audit quality and protecting public interest. Their attitude in compromising audit quality either by impaired objectivity or by cutting corners is unacceptable.

AFRC holds Briefing on its 2022 Annual Inspection Report to urge Quality Control System Responsible Persons of registered PIE auditors to enhance audit quality

AFRC holds Briefing on its 2022 Annual Inspection Report to urge Quality Control System Responsible Persons of registered PIE auditors to enhance audit quality 27 September 2023 To urge quality control system responsible persons ( QCSRP s ) of the registered PIE auditors to duly discharge their responsibilities in enhancing audit quality, the Accounting and Financial Reporting Council ( AFRC ) held a briefing session on its 2022 Annual Inspection Report on 22 September 2023, which was attended by over 40 target participants. Introducing the purpose of the briefing session, Ms Janey Lai, Head of Inspection, said, “The QCSRPs of registered PIE auditors are the most important gatekeepers within the firms as they hold the ultimate responsibility and accountability for the firms’ audit quality. Given their important roles, they should develop and strengthen a culture that fosters audit quality in the public interest.” ... The QCSRPs should ensure that the accountants and auditors of their firms understand thoroughly what they should and are expected to do to achieve high audit quality. The AFRC will hold the QCSPRs accountable for taking robust actions to enhance an effective quality management system in monitoring audit quality.”

Driving quality improvement – Setting the right tone at the top for performing an effective root cause analysis and remediation

Chairpersons and Managing Partners, to prioritise the following actions: Set the right tone at the top, emphasising audit quality and continuous improvement to ensure audit quality is always upheld; Adopt a proactive approach to address the identified deficiencies in their firms’ systems of quality management with concrete plans of remedial action; and Allocate sufficient and appropriate resources to the RCA and remediation process. ... Ms Janey Lai, CEO of the AFRC, highlighted, “Firms that uphold audit quality and protect their reputation are better positioned to attract and retain talent as younger generations seek alignment with their values and skill developments. Chairpersons and Managing Partners, as influential leaders, should unwaveringly focus on enhancing audit quality – audit quality must not be compromised under any circumstances.

CEO Ms Janey Lai's Opening Remarks at SCAA's "Enhanced Inspections and Regulatory Expectations on Audit Quality" Seminar (Chinese Only)

CEO Ms Janey Lai's Opening Remarks at SCAA's "Enhanced Inspections and Regulatory Expectations on Audit Quality" Seminar (Chinese Only) 22 May 2026 各位嘉賓、各位業界同仁：歡迎各位出席今日的簡報會。

AFRC publishes Inspection Insights and an explanatory video on the inspection of non-PIE practice units to drive continuous improvements in audit quality

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 To drive continuous improvements in audit quality, the Accounting and Financial Reporting Council ( AFRC ) today published the Inspection Insights ( The Insights ) and an explanatory video on the inspection of non-PIE practice units. ... Our Insights is valuable to auditors and should enable them to achieve high audit quality when they learn and improve their systems of quality management ( SoQM ) and key aspects of the audit. ... The Insights also provides our observations to drive continuous improvement in audit quality and the critical areas for improvement throughout the audit process: Insufficiency in risk identification and assessment in audit planning and why it is important to maintaining audit quality; Lack of effective review by engagement partners and engagement quality reviewers throughout the audit; and Shortfall of enhancement of integrity and quality of the audit documentation.

The Supervision and Evaluation Bureau of the Ministry of Finance and the Financial Reporting Council of the Hong Kong Special Administrative Region sign a Memorandum of Understanding to promote cross-boundary cooperation and enhance audit quality

The Supervision and Evaluation Bureau of the Ministry of Finance and the Financial Reporting Council of the Hong Kong Special Administrative Region sign a Memorandum of Understanding to promote cross-boundary cooperation and enhance audit quality 22 May 2019 (22 May 2019, Hong Kong) The Supervision and Evaluation Bureau (SEB) of the Ministry of Finance (MOF) and the Financial Reporting Council (FRC) of the Hong Kong Special Administrative Region today signed a Memorandum of Understanding (MOU) on cooperation in respect of audit regulation which marked a new page of collaboration. ... The MOU aims to enhance the quality and reliability of listed entities’ audits in order to protect the interests of investors and the public, and strengthen public trust in financial reporting and investors’ confidence in capital markets, thereby reinforcing Hong Kong’s position as an international financial centre. ... Dr Goa Jinxing, Director General of SEB said, “Years of practice have proved that the cooperation mechanism of audit regulation based on mutual reliance between the Mainland and Hong Kong is operating smoothly and effectively, and has played a positive role in improving the quality of the annual reports of listed entities in Hong Kong and promoting the connectivity of the financial markets between the two places.

2023 Annual Inspection Report emphasises the pivotal roles of the firm’s leadership in upholding audit quality and reinforces the importance of continuous learning as a key driver of improvement

Strong commitment from leaders of larger firms to improve audit quality Category A firms audited 89% of the PIE audits by market capitalisation. The leadership of most of them has taken proactive steps to improve their firms’ systems of quality management and audit practice. ... We expect to see better results in the future as these firms continue their journey to audit quality improvements.

Navigating economic uncertainty: Insights for 2024 year-end audits

Critical reminders to auditors are also provided to ensure that audit quality is upheld for the upcoming year-end audits. ... To assist auditors in planning and performing the 2024 year-end audits, this Audit Focus highlights key areas that they should pay particular attention to: Auditor’s responsibilities in responding to changes in the business landscape Obtain a sufficient understanding of the entity’s business and IT environment Identify, assess and respond to assessed risks arising from the current economic environment Other key aspects of audit quality Set and reinforce the ethical culture within the audit firm Maintain auditor independence Comply with all applicable laws and regulations Address potential issues related to change in auditor by a listed issuer Uphold the performance of quality engagement Ensure sufficient and timely involvement of the engagement partner and the engagement quality reviewer in the audit Recognise the importance of audit documentation and its integrity Assess the impacts of any new and revised accounting and auditing standards Maintain regular and transparent communication with the audit committee Early and proper audit planning lays the foundation for an effective and efficient quality audit. ... Highlighting these milestones, particularly those before year-end, enhances the transparency of the audit process and allows for early identification and resolution of significant accounting and auditing issues, thereby ensuring audit quality.

Search across website resources