Showing 17 - 24 of 303 results
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
This presents challenges to PIE auditors to conduct a quality audit under immense time pressure. ... The AFRC expects auditors, management of listed entities, and audit committees to continue upholding their critical roles in safeguarding the quality of financial reporting through collaborative efforts. ... PIE auditors, management and audit committees of the listed entities must continue to effectively fulfil their responsibilities as gatekeepers in the trading resumption process and prioritise audit quality over other considerations.
FRC finds that an auditor failed to identify a material misstatement and to express an appropriate audit opinion
Subsequently, the Listed Entity reissued the 2016 Financial Statements with adjustments to correct the abovementioned misstatement. The audit quality failure of the Auditor The investigation revealed that the Auditor failed to: (a) identify the risk of material misstatement at the assertion level in relation to the exchange reserve and appropriately design and perform substantive procedures to test the accuracy of the exchange differences attributable to Subsidiary A; and (b) evaluate the appropriateness and accuracy of the consolidation adjustment in relation to the translation of Subsidiary A’s financial statements. ... HKSA 600 Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors) prescribes the requirement to obtain sufficient appropriate audit evidence on which to base the audit opinion on the group financial statements. ... 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.
FRC completes an investigation relating to an auditor’s failure to obtain necessary evidence to conclude that an associate was not impaired
The Listed Entity considered that the Investment was not impaired with reference to a valuation report. The audit quality failure of the Auditor Determining the recoverable amount of the Investment involved significant judgements and estimates in appraising the future financial performance of the associate and the relevant business which are subject to a high level of estimation uncertainty and inherent risk of 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.
FRC completes first investigation with working papers obtained under MoU with the Supervision and Evaluation Bureau of the PRC Ministry of Finance
However, if the amount of new capital raised for each new share is not proportionate to the capital relating to each existing share, special considerations are required to be applied in measuring the average number of shares to reflect the difference in the amount of capital raised by the new shares in accordance with the applicable financial reporting standard. The audit quality failure of the Auditor The Auditor failed to identify the above material misstatement and therefore issued an inappropriate audit opinion. ... HKSA 220 Quality Control for an Audit of Financial Statements prescribes the consideration of appropriate consultation for a difficult or contentious matter by the engagement team. ... Our purpose in reporting publicly The FRC announces the adoption of reports on audit investigations and enquiries into financial reporting of listed entities to promote continuous improvement in the quality of auditing and financial reporting by all our regulatees, to caution audit committee members to consider the implications of our findings for the financial reporting and audits of their listed entities and to maintain public trust and confidence in the capital market and the effective functioning of the FRC as an independent auditor regulator. 1 International Accounting Standard 33 Earnings per share
FRC finds that an auditor failed to obtain the necessary evidence to support the measurement and recognition of a gain on extinguishment of a financial liability
The fair value of the Promissory Note on the date of its extinguishment was determined based on a valuation report. The audit quality failure of the Auditor The Auditor failed to adequately evaluate the validity of the qualitative factors to support that the change of terms of the Promissory Note was a substantial modification of the terms of an existing financial liability in accordance with the requirements of HKAS 39. ... HKSA 230 (Clarified) Audit Documentation deals with the auditor's responsibility to prepare audit documentation for an audit of financial statements. ... 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.
FRC finds that auditor failed to appropriately address an identified misstatement and to appropriately exercise professional judgement in determining overall materiality
The Consideration Payable was initially measured at the total amounts payable without taking into account the time value of money. The audit quality failure of the Auditor The Auditor identified the misstatement relating to the measurement of the Consideration Payable. ... 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.
AFRC publishes global audit regulation study, reinforcing dedication to world‑class standards
It also imposes conditions on registration renewal to address audit quality concerns. This regulatory focus is essential to guide PIE auditors in meeting the rising stakeholder expectations and maintaining high standards of audit quality ... • Inspections: Emphasising firm culture and transparency There is a growing recognition among audit regulators that audit quality is influenced by firm culture and governance. ... Later in the same year, the US PCAOB published insights on firm culture and audit quality across six largest audit firms.
FRC concludes that a listed entity failed to recognise an impairment loss on equity investments and its auditor failed to identify the misstatements
The Listed Entity also failed to provide disclosure about the judgement it made in determining the existence of objective evidence in the 2016 Financial Statements in accordance with HKAS 1 and HKFRS 7 (see below). The audit quality failure of the Auditor The Auditor failed to identify the above material misstatement and therefore issued an inappropriate unmodified audit opinion. ... 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: to promote continuous improvement in the quality of auditing and financial reporting by all our regulatees; to encourage audit committee members to consider the implications of our findings for the financial reporting and audits of their own listed entities; and to maintain public confidence in the system for independent auditor regulation.