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AFRC continues to take robust enforcement actions against registration and independence breaches
In Yeung’s case, independence was impaired through his dual roles as both auditor and company secretary of six private company audit clients. ... Auditors shall reassess these threats on an ongoing basis. ... Breaches of independence requirements, whether intentional or inadvertent, compromise auditors’ professional judgment and objectivity.
FRC issues its Annual Inspection Report
It also promotes transparency and a better understanding of our work, setting out our expectations of auditors and enabling all auditors (including those not yet inspected) to take action to improve audit quality. ... It also enables the FRC to amplify its regulatory impact by upholding high quality audits among auditors and promoting good corporate governance practices among listed entities. ... We also identified deficiencies in 46%, or 11, of the 24 audits where the auditor used the work of an auditor’s expert.
Press Releases
Chiang & Co. for serious violations of fundamental auditor independence requirements 22 May 2025 AFRC Reaffirms Commitment to Integrity in Response to Allegations Against Accountants 9 May 2025 AFRC sets out Strategic Priorities for 2025-2027 31 March 2025 AFRC welcomes the Government’s 2025-26 Budget 26 February 2025 Cross-Agency Steering Group sets 2025 priorities to support growth of sustainable finance in Hong Kong 6 February 2025 AFRC Study Advocates for Improved Sustainability Assurance Practices and Urges Auditors to Incorporate Climate Risks in Financial Audits 27 January 2025
FRC issues Annual Investigation and Compliance Report and Interim Inspection Report
Dr Kelvin Wong, Chairman of the FRC remarked, “As the independent auditor regulator of Hong Kong, the FRC is held accountable to the protection of public interest. ... We further identified that these are also one of the most common areas where the related work of auditors gives rise to actual or potential auditing irregularities.” ... Our aim is to enable auditors and audit committees to take action ahead of the next audit cycle.”
Complaints
Practice units registered with the AFRC (practice units) (shown in the AFRC’s registers of certified public accountants (Practising) (CPAs (Practising)), CPA firms/corporate practices , and registered PIE auditors ) Overseas auditors recognized by the AFRC to perform a public interest entity engagement ( recognized PIE auditors ) shown in the AFRC’s register CPAs registered with the Hong Kong Institute of Certified Public Accountants shown in the HKICPA Membership List Possible misconduct Examples of misconduct include: audit deficiency non-compliance with a professional standard, such as standard on professional ethics, accounting standard, auditing standard falsification of a document incorrect statement made in respect of a document negligence in the conduct of the person’s profession Hong Kong listed entities Non-compliance with accounting standards or other requirements (e.g. Listing Rules and Companies Ordinance, etc.) in the financial reports of listed entities If you acquired information about the alleged wrongdoing or misconduct as an employee working under a CPA, an auditor registered with or recognized by the AFRC or a listed entity, or through working with them, or from sources close to them, you may make a whistleblowing report to the AFRC. ... Therefore, we encourage you to provide: Full name and contact information of the CPA, practice unit and its registered responsible persons, recognized PIE auditors, and/or entity concerned; Description of the alleged misconduct or non-compliance in chronological order; Relevant supporting documents or records; and Your name and contact details.
FAQs - Complaints
What can I do if there is suspected misconduct of an auditor or a practice unit or non-compliance in relation to a listed entity? ... Auditors are responsible to the shareholders collectively and not to individual shareholders of a company. ... CPA (practising), CPA firm, corporate practice or registered PIE auditor) or recognised PIE auditor (Regulatees), you may make a complaint to the AFRC about their possible misconduct.
FRC launches Engagement and Consultation Paper on further reform of the accounting profession
Guidelines for Exercising the Power to Impose a Pecuniary Penalty for PIE Auditors and Registered Responsible Persons; C. ... Sanctions Policy for PIE Auditors and Registered Responsible Persons; and E. ... Discipline Policy Statement for PIE Auditors and Registered Responsible Persons; G.
AFRC reprimands PricewaterhouseCoopers and two others for multiple audit deficiencies and imposes fines totalling HK$1.6 million
In both years, the Auditor performed deficient audit work on revenue recognition and failed to obtain sufficient appropriate audit evidence of the Group’s recorded revenues, resulting in the incorrect issuance of an unmodified audit opinion. ... Instead, the Auditor improperly relied on the Group’s internally generated sales orders and goods delivery notes even though they did not provide any evidence of delivery and acceptance of goods, being essential criteria for revenue recognition. ... This case underscores the need for auditors to exercise professional skepticism, particularly in high-risk areas such as revenue recognition with heightened risk of fraud.”