Showing 9 - 16 of 252 results
AFRC issues an open letter to express its growing concern over late auditor resignations
AFRC issues an open letter to express its growing concern over late auditor resignations 27 October 2022 The Accounting and Financial Reporting Council ( AFRC ) today issues an open letter to all public interest entity ( PIE ) auditors to express its growing concern over the surge in number of PIE auditors resigning just one month before or even after the end of the reporting period of a listed entity. ... The AFRC will continue to monitor closely the late changes in auditor appointments and the audit quality of the relevant entities and will not hesitate to take follow-up actions when appropriate.” ... We urge PIE auditors to adopt a proactive attitude in addressing our grave concerns in relation to the late changes in auditor appointments and to maintain a close and effective dialogue with audit committees of listed entities in resolving any contentious audit matters.
Local PIE Auditor
Local PIE Auditor Registration of Hong Kong auditors as PIE auditors A practice unit intending to undertake (i.e. accept an appointment for carrying out) or carry out any PIE engagement, or to hold out as a registered PIE auditor, is required to be registered as a registered PIE auditor. Click here to apply for, update practising information or renew your registration of a PIE auditor (Available to registered CPA firms and corporate practices only) Click here to find registered PIE auditors. ... Add or remove responsible persons This video introduces how to submit an online application for requesting the addition or removal of responsible persons of a PIE auditor through the system. Renew your registration This video guides you through the steps to submit your PIE renewal application between 1 October and 16 November of the year.
Navigating economic uncertainty: Insights for 2024 year-end audits
Critical reminders to auditors are also provided to ensure that audit quality is upheld for the upcoming year-end audits. ... To assist auditors in planning and performing the 2024 year-end audits, this Audit Focus highlights key areas that they should pay particular attention to: Auditor’s responsibilities in responding to changes in the business landscape Obtain a sufficient understanding of the entity’s business and IT environment Identify, assess and respond to assessed risks arising from the current economic environment Other key aspects of audit quality Set and reinforce the ethical culture within the audit firm Maintain auditor independence Comply with all applicable laws and regulations Address potential issues related to change in auditor by a listed issuer Uphold the performance of quality engagement Ensure sufficient and timely involvement of the engagement partner and the engagement quality reviewer in the audit Recognise the importance of audit documentation and its integrity Assess the impacts of any new and revised accounting and auditing standards Maintain regular and transparent communication with the audit committee Early and proper audit planning lays the foundation for an effective and efficient quality audit. To that end, this Audit Focus outlines key milestones and essential actions for auditors, management and audit committees of listed entities during different phases of an audit.
Non-Hong Kong PIE Auditor
Non-Hong Kong PIE Auditor Recognition of non-Hong Kong auditors as PIE auditors A non-Hong Kong auditor intending to undertake (i.e. accept an appointment for carrying out) or carry out any PIE engagement for a non-Hong Kong entity, is required to be recognised as a recognized PIE auditor. Chinese Mainland auditors An auditor who has been endorsed as being qualified to act as the auditor for a corporation incorporated in Chinese Mainland and listed in Hong Kong under the mutual recognition agreement between Chinese Mainland and the Hong Kong SAR (the Mutual Recognition Agreement), will be recognised as a PIE auditor without a recognition application being made to the AFRC. ... However, if there is a change in full name, business address, telephone number and/or electronic mail address of a recognized PIE auditor in Chinese Mainland, the auditor must, within 14 days after the day on which the change takes place, inform the AFRC of the change.
FRC finds that an auditor failed to obtain the necessary evidence to support the measurement and recognition of a gain on extinguishment of a financial liability
FRC finds that an auditor failed to obtain the necessary evidence to support the measurement and recognition of a gain on extinguishment of a financial liability 30 December 2021 The FRC adopted an investigation report finding that the auditor ( the Auditor ) of a listed entity ( Listed Entity ) failed to obtain sufficient appropriate audit evidence to support the measurement and recognition of a gain on extinguishment of a promissory note ( the Promissory Note ) included in the consolidated financial statements of a Listed Entity for the year ended 31 March 2013. ... The audit quality failure of the Auditor The Auditor failed to adequately evaluate the validity of the qualitative factors to support that the change of terms of the Promissory Note was a substantial modification of the terms of an existing financial liability in accordance with the requirements of HKAS 39. ... The Auditor used the valuation report as part of the audit evidence and engaged a valuer to review the valuation report during the audit.
FRC concludes that a listed entity failed to properly account for the interests in two investees and its auditor failed to identify the misstatements
FRC concludes that a listed entity failed to properly account for the interests in two investees and its auditor failed to identify the misstatements 20 April 2022 On 14 April 2022, the FRC adopted an investigation report which found that the auditor ( the Auditor ) of a listed entity ( the Listed Entity ) failed to identify material misstatements in relation to: (a) the accounting of the Listed Entity’s equity interest in an investee ( Investee A ) in the consolidated financial statements for the years ended 31 December 2013 ( the 2013 Financial Statements ) and 31 December 2014 ( the 2014 Financial Statements ); and (b) the non-consolidation of a wholly-owned subsidiary ( Investee B ) which carried on a referral business ( the Referral Business ) in the 2014 Financial Statements. ... The audit quality failure of the Auditor The investigation revealed that the Auditor failed to: (a) obtain sufficient appropriate audit evidence, e.g. the Articles of Association of Investee A, on which to base its conclusion on the accounting treatment of the Group’s interest in Investee A; (b) evaluate management representations with sufficient professional skepticism; (c) properly apply the applicable financial reporting standards in evaluating the accounting treatment of the Group’s interests in Investee A and Investee B; and (d) communicate the accounting treatment of the Group’s interests in Investee A and Investee B with those charged with governance as the determination of the treatment involved significant management judgment. As a result of the above failures, the Auditor issued an inappropriate unmodified audit opinion on each of the 2013 Financial Statements and the 2014 Financial Statements.
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 respect of the audit of the impairment assessment of goodwill as at 31 March 2014 arising from an acquisition of a subsidiary. In particular, it was found that the auditor and the engagement partner were in breach of Hong Kong Standard on Auditing ( HKSA ) 500 (Clarified) Audit Evidence and HKSA 540 (Clarified) Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures .
FRC collaborates with IFEC to promote financial literacy on audit related topics to retail investors
The purpose of an audit is to enhance user confidence in the credibility of financial statements or to raise red flags when appropriate. The auditor’s report is the auditor’s communication channel to users and enables that purpose to be met when the auditor’s report is read in conjunction with the financial statements by investors who have the necessary financial literacy. ... Whereas the auditor’s opinion is about the financial statements, KAMs are about the audit. They address those matters that the auditor considers to have been of most significance in the audit.