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AFRC Hosts Landmark Regional Regulatory Forum 2024
Mr Ian Stone advocated for ethical management and due diligence, stressing that audit committees should prioritise auditor quality over audit fees. ... Overall, cooperation among regulators, auditors, companies, and investors is vital for developing a sustainable and resilient financial ecosystem. ... Rob Johnson emphasised the importance of global cooperation to tackle challenges like technology and climate change, advocating for collaboration within the financial ecosystem to inspire future accountants.
Cross-Agency Steering Group sets 2025 priorities to support growth of sustainable finance in Hong Kong
Note 3: The 29th Conference of the Parties to the United Nations Framework Convention on Climate Change, commonly known as COP29.
Cross Agency Steering Group announces Strategic Priorities for 2026–2028
Key updates include expanding the taxonomy scope to six sectors, increasing economic activities from 12 to 25, introducing transition elements and adding a new environmental objective on climate change adaptation to address growing physical climate risks and extreme weather challenges.
Advisory Committee
He is the founding Chairman of the Hong Kong Association of Registered Public Interest Entity Auditors, the Chairman of the Consumer Council and the Chairman of the Audit Committee of the HKICPA. ... She is a Council Member and Past President of the Society of Chinese Accountants & Auditors and the Association of Women Accountants (Hong Kong) Limited. ... She also sits on the global steering committee of the Climate Action 100+ initiative and co-chairs the China working group of the Asia Investor Group on Climate Change. Ms Wang holds a Master of Science in Finance from the Lee Kong Chain School of Business at Singapore Management University and a Bachelor of Arts in Economics from Tsinghua University.
Inspection Process
When deciding whether to inspect a particular auditor in any particular year, and the ambit of the inspection to be carried out, the AFRC will consider, amongst other things: a. the AFRC's assessment of the risks associated with the auditor's practice based on available information; b. the size of the auditor, including but not limited to the number of clients and practising partners or directors of the auditor during the period; c. the complexity of the practice and the engagements of the auditor; d. the auditor’s regulatory history, including but not limited to the results of any prior inspection; e. the period of time since the auditor was last inspected by the AFRC; f. the level of public interest involved in the auditor’s engagements; and/or g. the AFRC's available resources. For the AFRC's determination of the frequency of inspection, the AFRC may from time to time require a auditor to provide various information, including but not limited to: a. the number of PIE engagements that the auditor has undertaken or carried out within a specified period; b. the full name of the PIEs that have appointed the auditor to undertake PIE engagements; or c. any other information relating to the auditor. ... Inspection - Notification of inspection to the auditor Before the start of an inspection, an inspector will notify the auditor in writing of the time the AFRC plans to conduct the inspection.
FAQs - Investigations
We investigates all professional persons as defined in AFRCO including: PIE auditor Registered PIE auditor Recognized PIE auditor Registered responsible person of a registered PIE auditor An engagement partner; An engagement quality control reviewer; or A quality control system responsible person. Non-PIE auditor Professional person CPA Practice Unit (CPA (Practising), CPA firm, Corporate practice) 3. ... In relation to non-PIE auditors Pursuant to section 23A of the AFRCO, the AFRC may direct an investigator to carry out an investigation in relation to a non-PIE auditor where the AFRC has a reasonable cause to believe that a non-PIE auditor has or had committed a practice irregularity as defined under section 4 of the AFRCO.
AFRC emphasises the importance of adherence to registration requirements for carrying out PIE engagements
The AFRCO stipulates that PIE engagements can only be undertaken and carried out by local PIE auditors registered with the AFRC ( registered PIE auditors ) or overseas PIE auditors recognised by the AFRC. For registered PIE auditors, the AFRCO also sets out specific registration requirements for individuals acting as an engagement partner ( EP ) or an engagement quality control reviewer ( EQCR ) for PIE engagements, including the following: Any individual who is to act as an EP or an EQCR of a PIE engagement must be a registered EP or a registered EQCR (as the case may be) of the particular registered PIE auditor concerned, before undertaking any activities in such capacities; and A registered PIE auditor must not authorise any person who is not a registered EP or a registered EQCR of that particular registered PIE auditor to carry out any activities in such capacities. ... We urge PIE auditors and relevant personnel to closely follow the AFRC’s Guide for the Registration of PIE Auditors which provides detailed criteria and procedures for registration and renewal applications for registered PIE auditors.
AFRC issues its first Report on the Analysis of the PIE Audit Market in Hong Kong
As at 30 June 2023, the vacancy rate for associates and senior associates was highest in Category C PIE auditors at 25.5% and 24.2% respectively, followed by Category B PIE auditors at 16.1% and 16.9% respectively, and 5.8% and 4.5% respectively for Category A PIE auditors. 2 The average attrition rate for associates and senior associates in different categories of local PIE auditors ranged from 33.2% to 36.2% and 22.1% to 39.0% respectively in the year ended 30 June 2023. ... When asked how frequently audit teams of PIE auditors experienced fee pressure that may compromise audit quality in 2023, 33.3% of Category A PIE auditors, 47.6% of Category B PIE auditors, and 52.9% of Category C PIE auditors experienced such pressure. ... This could allow PIE auditors to leverage a diverse talent pool and enhance audit quality.