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Financial Reporting Council publishes Guideline on notification of changes in auditor appointments
Financial Reporting Council publishes Guideline on notification of changes in auditor appointments 4 December 2020 (4 December 2020, Hong Kong) The Financial Reporting Council (FRC) today published its Guideline on the notification of changes in auditor appointments, which will become effective on 1 February 2021. The Guideline requires auditors of listed entities to provide the FRC with up to date information on their appointments as auditor to PIEs and of any changes in those appointments. ... Mr Marek Grabowski, CEO of the FRC remarked, “The FRC issued the Guideline to enable us to receive timely and accurate information on changes in auditor appointments and strengthen the effectiveness of our inspections.
AFRC advocates healthy practices in auditor appointments and audit fee setting to safeguard public trust
AFRC advocates healthy practices in auditor appointments and audit fee setting to safeguard public trust 31 July 2025 The Accounting and Financial Reporting Council ( AFRC ) today releases an article titled “ Upholding trust in capital markets: Maintain healthy practices in auditor ” appointments and audit fee setting . ... Key insights from our research: Late auditor appointments continue to challenge audit delivery. ... Late auditor appointments compress audit schedules, increasing the risk of undetected misstatements in first-year audits, as new auditors must quickly familiarise themselves with the business and carry out additional audit procedures.
Local PIE Auditor
Local PIE Auditor Registration of Hong Kong auditors as PIE auditors A practice unit intending to undertake (i.e. accept an appointment for carrying out) or carry out any PIE engagement, or to hold out as a registered PIE auditor, is required to be registered as a registered PIE auditor. Click here to apply for, update practising information or renew your registration of a PIE auditor (Available to registered CPA firms and corporate practices only) Click here to find registered PIE auditors. ... Add or remove responsible persons This video introduces how to submit an online application for requesting the addition or removal of responsible persons of a PIE auditor through the system. Renew your registration This video guides you through the steps to submit your PIE renewal application between 1 October and 16 November of the year.
FAQs - Inspection
How often will auditors be subject to inspection? ... PIE auditors that audit more than 100 PIEs will be inspected annually. ... Such risk factors include but are not limited to, where applicable, the following: the nature or principal activities of the entity whether the entity has significant operations in certain emerging businesses or markets those industries that were severely impacted by the current economic conditions areas that present audit challenges and/or significant audit risks whether the engagement partners or engagement quality control reviewers are subject to investigation or sanction that the auditor’s report was issued shortly after the appointment the level of public interest, such as audits of listed entities with larger market capitalisation and capital market transaction engagements such as initial public offerings the incoming auditor accepted a substantial reduction in the audit fee 6.
AFRC urges auditors and audit committees to follow Guidance Notes on Change of Auditors
AFRC urges auditors and audit committees to follow Guidance Notes on Change of Auditors 28 September 2023 The Accounting and Financial Reporting Council ( AFRC ) has been closely monitoring the phenomenon of late auditor resignations and its adverse impact on audit quality. ... Ms Mary Leung, Head of Policy, Registration and Oversight, said, “Our concerns extend beyond the issues related to late auditor resignations. We also focus on whether auditors and audit committees fulfill their respective responsibilities in managing auditor changes. To help PIE auditors and audit committees navigate such situations, the AFRC publishes the Guidance Notes which articulate our expectations of PIE auditors and audit committees when changing auditors.
FAQs - Local PIE Auditor
FAQs - Local PIE Auditor Registered PIE Auditor 1. ... Under the AFRCO, only a practice unit registered with the AFRC as a registered PIE auditor under Division 2 of Part 3 of the AFRCO or an overseas auditor Recognized by the AFRC as a Recognized PIE auditor under Division 3 of Part 3 of the AFRCO may carry out PIE engagements. ... Where can I obtain a full list of registered PIE auditors? The AFRC maintains a register of registered PIE auditors (Hong Kong PIE auditors) and recognized PIE auditors (non-Hong Kong PIE auditors) on its website. 20.
AFRC issues an open letter to express its growing concern over late auditor resignations
The majority of the late PIE auditor appointments for listed entities with significant operations in Mainland China or overseas were taken up by PIE auditors whose relevant experience and available resources appeared disproportionate to these audits. ... The AFRC will continue to monitor closely the late changes in auditor appointments and the audit quality of the relevant entities and will not hesitate to take follow-up actions when appropriate.” ... We urge PIE auditors to adopt a proactive attitude in addressing our grave concerns in relation to the late changes in auditor appointments and to maintain a close and effective dialogue with audit committees of listed entities in resolving any contentious audit matters.
FRC concludes that a listed entity failed to properly account for the interests in two investees and its auditor failed to identify the misstatements
FRC concludes that a listed entity failed to properly account for the interests in two investees and its auditor failed to identify the misstatements 20 April 2022 On 14 April 2022, the FRC adopted an investigation report which found that the auditor ( the Auditor ) of a listed entity ( the Listed Entity ) failed to identify material misstatements in relation to: (a) the accounting of the Listed Entity’s equity interest in an investee ( Investee A ) in the consolidated financial statements for the years ended 31 December 2013 ( the 2013 Financial Statements ) and 31 December 2014 ( the 2014 Financial Statements ); and (b) the non-consolidation of a wholly-owned subsidiary ( Investee B ) which carried on a referral business ( the Referral Business ) in the 2014 Financial Statements. ... The Listed Entity had the right to appoint two out of five members of the board of Investee A which evidenced its significant influence over Investee A. ... As a result of the above failures, the Auditor issued an inappropriate unmodified audit opinion on each of the 2013 Financial Statements and the 2014 Financial Statements.