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Information required for inspection
Information required for inspection An auditor will be notified in writing if it is selected for inspection. ... The auditor should provide the required information to the AFRC by the specified date(s) in the notification. ... Last update: March 2026 Inspection of PIE auditors Click to view Inspection of non-PIE auditors Click to view Standalone Anti-money Laundering and Counter-terrorist Financing Compliance Monitoring Inspection Click to view
AFRC analyses trading suspensions of listed entities due to delays in preliminary annual results announcements and calls for continued efforts to uphold high-quality audits and financial reporting
Additionally, the report provides clear recommendations for public interest entity ( PIE ) auditors, audit committees, and management of listed entities. ... This presents challenges to PIE auditors to conduct a quality audit under immense time pressure. ... Vulnerability of opinion shopping by listed entities whose management chose to appoint new auditors instead of addressing concerns raised by the outgoing auditors.
FRC and the HKICPA signed a Statement of Protocol on Oversight Arrangements
Under the Amendment Ordinance, the FRC is vested with direct powers of inspection, investigation, discipline concerning auditors of Public Interest Entities (PIE) and recognition of overseas PIE auditors, and powers of oversight of the performance of the HKICPA in relation to registration of, setting of continuing professional development (CPD) requirements, and setting of standards on professional ethics, auditing and assurance for registered PIE auditors. ... Under the Statement of Protocol, the FRC will have access to information in relation to the HKICPA’s performance of the registration of PIE auditors, matters concerning the setting of CPD requirements for PIE auditors and the setting of standards on professional ethics, auditing and assurance for registered PIE auditors. ... Dr Kelvin Wong, Chairman of the FRC remarked, “The Statement signed today will facilitate the FRC in discharging our statutory oversight duty effectively as the independent auditor regulator of Hong Kong.
AFRC’s follow-up survey on the implementation progress of the new and revised quality management standards
As of the end of September 2022, we surveyed in total 44 Registered PIE Auditors and 24 overseas Recognized PIE Auditors with a 100% response rate. ... Implementation progress of Engagement Quality Review (EQR) 43% of the PIE auditors have yet to establish EQR policies and procedures. ... Lai said, “We strongly urge PIE auditors to pay attention to our observations, good practices and key reminders shared in the report.
FAQs - General
Who is a PIE auditor? A PIE auditor means 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. 5. ... A registered responsible person means any of the following individuals whose name is recorded in the registered PIE auditors register as a responsible person of a registered PIE auditor: an engagement partner; an engagement quality control reviewer; or a quality control system responsible person. 6. ... Examples of a “practice irregularity” include situations where a PIE auditor, registered responsible person or non-PIE auditor, in relation to a PIE engagement or non-PIE engagement: falsified or caused to be falsified a document; made a statement, in respect of a document, that was material and that the PIE auditor or registered responsible person knew to be false or did not believe to be true; has been negligent in the conduct of the PIE auditor’s or registered responsible person’s profession; has been guilty of professional misconduct; did or omitted to do something that would reasonably be regarded as bringing or likely to bring discredit on the PIE auditor, registered responsible person, the Hong Kong Institute of Certified Public Accountants (“HKICPA”) or the accountancy profession; failed or neglected to observe, maintain or otherwise apply a professional standard; or refused or neglected to comply with any direction lawfully given by the AFRC, or the provisions of any bylaw or rule made, or any direction lawfully given by the Council of the HKICPA.
Investigation and Compliance
Investigation and Compliance Overview The AFRC exercises its statutory mandate to conduct investigations and enquiries, including conducting investigations into possible misconduct by PIE auditors and professional persons (including CPAs and practice units), and enquiries into potential non-compliance with accounting requirements by PIEs in their financial reports. The AFRC may initiate an investigation and/or enquiry based on complaints from the public, whistleblower reports, referrals from other regulators, internal referrals arising from inspections of auditors, or its own financial statements review programme. For an understanding of the legal framework under the AFRCO and the investigation function of the AFRC, please refer to the details set out in the following policy statements: 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) Enquiry Policy Statement for Listed Entities Complaints Learn how your complaints support our regulatory oversight Whistleblowing Gain insight into our whistleblowing mechanism and its role Bogus CPA Understand our actions against "bogus CPAs" to protect the profession Investigations Learn more about the investigation process for PIE Auditors and Non-PIE Auditors, including their registered responsible persons, and professional persons Enquiries Gain insight into our enquiries into listed entities' reporting compliance Financial Statements Review Programme Understand our programme for monitoring listed entities' financial statements
FRC Press Statement on New Inspection Regime of the Companies Register
In response to questions raised with the FRC as to how the current proposal may affect the professional work of listed entity auditors, the FRC would like to provide the following statement. Under both Hong Kong and international standards on auditing, in performing an audit engagement including one for a listed entity, an auditor must obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level, thereby enabling the auditor to draw a reasonable conclusion on which to base the auditor’s opinion. Whether sufficient appropriate audit evidence has been obtained for the auditor to do so is a matter of professional judgment.
AFRC reprimands BDO Limited and two others for breaches of multiple auditing standards, imposes fines totalling HK$455,000 and gives directions for additional CPD
The Auditor had also engaged a valuation expert ( Expert ) to assist with reviewing the valuation of the E-Business. ... Ms Hester Leung, Head of Discipline, stated, “Auditors often need experts’ assistance in specialised areas outside of accounting and auditing. However, auditors should not rely on their experts’ work without critical evaluation.