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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 convertible note that contained contingent settlement provisions. The investigation revealed that the auditor and the engagement partner failed to perform the relevant audit, in relation to the convertible note, in accordance with the relevant provisions of Hong Kong Standard on Auditing (HKSA) 200 (Clarified) Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing and HKSA 500 (Clarified) Audit Evidence .
AFRC highlights impact of current economic conditions on financial reporting and audit practices
It also provides relevant insights for company management, audit committees, and auditors. Impact on financial reporting : Economic conditions influence companies’ business strategy, management behaviour, and financial position. ... Audit committees should oversee the process to ensure high-quality financial reporting. Role of auditors: Auditors should assess how economic conditions impact financial statements and audit practices. ... Ms Janey Lai, CEO of the AFRC, said, “Auditors must assess economic conditions throughout the audit.
AFRC reprimands and fines Rongcheng (Hong Kong) CPA Limited, Lee Wai Chi and Chan Kin Wai over HK$1.18 million for contraventions of registration and notification requirements under the AFRCO
Mr Denis Cheng, Head of Investigation and Compliance, said, “PIE auditors and their responsible persons must adhere to the registration requirements in relation to PIE engagements. ... The AFRC will continue to take stringent enforcement actions against PIE auditors and practitioners who breach those requirements, to safeguard the standards and credibility of the profession.” The profession and stakeholders may inspect the PIE auditors register on the AFRC’s website to access up-to-date registration details and information on PIE auditors’ registered responsible persons.
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) impairment assessments on amounts due from subsidiaries; and (b) loss on extinguishment of financial liabilities and accounting of convertible notes. The investigation revealed that the auditor and the engagement partner failed to properly perform the relevant audit, in relation to the above matters, in accordance with the relevant provisions of Hong Kong Standard on Auditing (HKSA) 200 (Clarified) Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing and HKSA 500 (Clarified) Audit Evidence .
Completed investigation
The FRC found that the auditor, the engagement partner and the engagement quality control reviewer for the relevant audit failed or neglected to observe, maintain or otherwise apply certain professional standards in relation to the Group’s investments in associates. The investigation revealed that the auditor and the engagement partner failed to perform the relevant audit, in relation to the Group’s investments in associates, in accordance with the relevant provisions of Hong Kong Standard on Auditing ( HKSA ) 200 (Clarified) Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing , HKSA 500 (Clarified) Audit Evidence , and HKSA 700 (Clarified) Forming an Opinion and Reporting on Financial Statements.
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 convertible note that contained contingent settlement provisions. In particular, the investigation revealed that the auditor and the engagement partner failed to perform the relevant audit, in relation to the convertible note, in accordance with relevant provisions of Hong Kong Standard on Auditing (HKSA) 200 (Clarified) Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing ; HKSA 500 (Clarified) Audit Evidence ; and HKSA 510 (Clarified) Initial Audit Engagements – Opening Balances .
Our Role
On 1 October 2019, the Financial Reporting Council (Amendment) Ordinance came into effect, transforming the FRC into Hong Kong's independent auditor regulator. It was vested with direct powers of inspection and investigation, as well as the authority to recognise overseas auditors of listed entities and discipline PIE auditors. The AFRC is also responsible for overseeing the performance of the Hong Kong Institute of Certified Public Accountants (HKICPA) in relation to their functions concerning auditors of listed entities, including registration, setting standards on professional ethics, auditing and assurance, and setting continuing professional development requirements. ... Registration of accounting practice units and Public Interest Entities auditors. Inspection and enforcement of audit quality in the accounting profession.
Completed investigation on the audit of the consolidated financial statements of a listed entity for the year ended 31 March 2017
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 the corresponding figures on inventories and revenue. The investigation revealed that the auditor and the engagement partner failed to properly perform the relevant audit, in relation to the above matters, in accordance with the relevant provisions of Hong Kong Standard on Auditing (HKSA) 500 Audit Evidence , HKSA 600 Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors) and HKSA 710 Comparative Information – Corresponding Figures and Comparative Financial Statements .