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FRC publishes its 2019 Annual Report
To duly reflect the commencement of the new auditor regulatory regime when the Financial Reporting Council (Amendment) Ordinance (the Amendment Ordinance) took effect on 1 October 2019, the Annual Report covers a nine-month period from 1 January to 30 September 2019. Dr Kelvin Wong, Chairman of the FRC, remarked, “After months of intense preparations, the FRC has successfully transformed itself to become the full-fledged independent oversight body for regulating auditors of public interest entities on 1 October 2019. ... Ms Florence Wong, Acting CEO of the FRC said, “This Annual Report not only outlines our preparatory work for the transformation into the full-fledged independent auditor regulator but also reviews the mission and objectives that the FRC has set to ensure the effectiveness of our expanded regulatory roles.”
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.
Press Releases
Press Releases AFRC sets out its position on documentation of an auditor’s work on “other information” included in the annual report of a listed entity 28 April 2023 AFRC issues the Audit Fee Report and 2023 Survey Report on the implementation of Guidelines for Effective Audit Committees – Selection, Appointment and Reappointment of Auditors 24 March 2023 AFRC’s Briefing at LegCo Panel on Financial Affairs on 2023-24 budget 17 March 2023 Celebrating a major milestone for the accounting profession – 50th anniversary of the accounting profession 2 March 2023 AFRC welcomes the Government’s 2023-24 Budget 22 February 2023 Joint statement on the designation “Fellow of the Hong Kong Institute of Certified Public Accountants (Practising)” 16 January 2023
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
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.
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.”