Showing 161 - 168 of 282 results
Completed investigation
The FRC found that the auditor, the engagement partner and the engagement quality control reviewer failed or neglected to observe, maintain or otherwise apply certain professional standards in the relevant audit in relation to a business combination in respect of (a) the classification and measurement of contingent consideration; (b) the acquisition-date fair value measurement of the intangible assets acquired; and (c) the expected useful lives and the subsequent measurement of the intangible assets. In particular, the investigation revealed that, in relation to the above matters, (a) the auditor and the engagement partner failed to properly perform the relevant audit in accordance with the relevant provisions of HKSA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing ; HKSA 500 Audit Evidence ; HKSA 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures ; and HKSA 620 Using the work of an auditor’s expert .
AFRC welcomes the Government’s support for a funding injection
Since acquiring full regulatory functions over public interest entity ( PIE ) auditors in October 2019, the AFRC has been exercising strict budgetary controls in order to discharge its statutory functions, including its prudent use of the initial seed capital of $400 million for the disbursement of its first two years’ operating expenses in the absence of any levy income. In line with the prevailing international practices of vesting powers to an independent body for the regulation of accounting profession, since October 2022, the AFRC has been vested with expanded functions and powers over the non-public interest entity ( non-PIE ) auditors. Pending exploration of new long-term financing models with the Government for the non-PIE auditors, it became necessary to deploy the balance from the initial seed capital as at 1 October 2022, originally intended for the PIE auditor regime, to support the funding of the expanded functions as an interim measure.
Reports
Reports Inspection Checkpoint - Reminders for Auditors’ Reporting on Licensed Corporations Audit 28 March 2025 Policy and Governance Market Readiness for Sustainability Reporting and Assurance in Hong Kong Corporate Governance Sustainability Assurance 27 January 2025 Inspection Checkpoint – Obtaining an Understanding of the Audit Clients’ IT Environments Audit Technology 24 January 2025 Inspection Inspection Insights – Root Cause Analysis and Remediation: A Call to Action for Quality Improvement Audit Quality Management System 1 December 2024 Inspection Overview of the Non-Public Interest Entity Audit Market in Hong Kong Audit Quality Management System 30 October 2024 Policy and Governance Audit Implications of Current Economic Conditions for Hong Kong-listed Companies Audit Auditor Changes Corporate Governance Sustainability Assurance 21 October 2024 Inspection Audit Focus: 2024 year-end audits Audit Corporate Governance Quality Management System 9 October 2024 Policy and Governance Safeguarding Auditor Independence: Concerns Surrounding Procurement and Purchases from Audit Clients Audit Corporate Governance Quality Management System 4 October 2024 Oversight 2024 Oversight Report on HKICPA’s Performance of Specified Functions Audit Financial Reporting 16 September 2024 Investigation and Compliance 2024 Annual Investigation and Compliance Report Audit Financial Reporting 28 August 2024 Inspection 2023 Annual Inspection Report Audit Corporate Governance Quality Management System 11 July 2024 Inspection Analysis of Listed Entities Suspended from Trading Due to Delay of Preliminary Annual Results Announcement Audit Auditor Changes Corporate Governance Quality Management System 5 July 2024
Reports
Reports Policy and Governance Reminder to PIE auditors: Be Prepared for Undertaking PIE Engagements Audit Quality Management System 28 June 2024 Policy and Governance Setting and Reinforcing Tone at the Top to Achieve Quality Audits Audit Corporate Governance Quality Management System 27 June 2024 Policy and Governance Roundtable Discussion on Audit Quality and Climate-integrated Audits in Hong Kong Audit Auditor Changes Corporate Governance Financial Reporting Sustainability Assurance 13 June 2024 Policy and Governance The Importance of Audit Documentation Integrity Audit Quality Management System 29 May 2024 Policy and Governance Report on the Analysis of the Public Interest Entity Audit Market in Hong Kong Audit Corporate Governance Financial Reporting Quality Management System Technology 27 March 2024 Policy and Governance Continuing Professional Development as a Key to Improving Audit Quality in Hong Kong Audit 8 January 2024 Inspection Audit Focus: 2023 Financial Year-end Audit Reminder Audit Corporate Governance Quality Management System 22 December 2023 Inspection Inspection Insights Audit Quality Management System 30 November 2023 Oversight 2023 Oversight Report on HKICPA’s Performance of Specified Functions Audit Financial Reporting 20 November 2023 Policy and Governance AFRC Addresses Concerns Surrounding Auditor Changes Audit Auditor Changes 28 September 2023 Investigation and Compliance 2023 Annual Investigation and Compliance Report Audit Financial Reporting 4 September 2023 Inspection Audit Focus: Effective Planning - The Key to High-Quality Audits Audit Corporate Governance 31 July 2023
Disciplinary Cases
Substantial weaknesses in the auditor’s governance and monitoring controls in respect of the relevant audits were also identified. ... He also failed to properly evaluate the relevant auditor’s conclusion on its independence. ... The auditor also relied on the deficient work carried out by the auditor’s valuation expert without exercising sufficient professional skepticism.
Completed investigation
The FRC found that the auditor and the engagement partner failed or neglected to observe, maintain or otherwise apply certain professional standards in the relevant audit in respect of the impairment assessment of the amount due to the listed entity from its subsidiary. The investigation revealed that the auditor and the engagement partner failed to properly perform the relevant impairment assessment in accordance with the relevant provisions of Hong Kong Standard on Auditing ( HKSA ) 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing , HKSA 500 Audit Evidence , and HKSA 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures.
Audit Focus for 2023 year-end audit
With the current economic circumstance of high interest rates, inflationary pressure, and credit crunch, auditors should exercise due diligence in addressing areas that are susceptible to the impact of rising costs, alterations in contract and pricing terms, changes in credit risks, and the potential pressures or incentives for management to commit in financial reporting fraud. The key areas requiring particular attention of auditors include, but are not limited to: Revenue recognition; Impairment assessment; Fair value measurement of assets or financial instruments; Provision for onerous contracts; Going concern assessment; and Fraud risk assessment. Ms Janey Lai, Acting CEO remarks, “By focusing on the key risks outlined in this Audit Focus, auditors can identify potential areas of material misstatement or fraud and allocate the necessary resources to address them.
Investigations
Investigations The AFRC, as Hong Kong's independent regulator of the accounting profession, is entrusted with the statutory duty to initiate investigations into potential misconduct by PIE auditors, registered responsible persons, non-PIE auditors, and professional persons, referring substantiated cases to the Discipline Department for sanctions or escalation to other regulators or law enforcement agencies. ... For details, please refer to: Investigation Policy Statement for PIE Auditors, Non-PIE Auditors and Registered Responsible Persons Investigation Policy Statement for Professional Persons Investigation Policy Statement (in relation to audits or the preparation of specified reports completed for listed entities before 1 October 2019) .