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Disciplinary Sanctions
Disciplinary Sanctions The disciplinary sanctions are set out under the AFRCO. An overview of the types of sanctions applicable to the two categories of regulatees is set out below: PIE auditors and registered responsible persons Professional persons (i.e. ... Relevant Guidance Materials Sanctions Policy for PIE Auditors and Registered Responsible Persons Sanctions Policy for Professional Persons Guidelines for Exercising the Power to Impose a Pecuniary Penalty for PIE Auditors and Registered Responsible Persons Guidelines for Exercising the Power to Impose a Pecuniary Penalty for Professional Persons
Financial Reporting Council publishes consultation conclusions on Proposed Sanctions Guidelines
Financial Reporting Council publishes consultation conclusions on Proposed Sanctions Guidelines 31 May 2019 The Financial Reporting Council (FRC) published its consultation conclusions on the proposed Sanctions Guidelines today, which summarised the views and comments received in the Consultation on Sanctions Guidelines (Consultation) conducted from 13 March to 17 April this year and our responses thereto. During the Consultation, the FRC had arranged 15 meetings with different stakeholders including audit firms that audit listed entities in Hong Kong and professional bodies to explain in details our proposed Sanction Guidelines and clarify on issues of concerns. Dr Kelvin Wong, Chairman of the FRC remarked, “The FRC is pleased that our Consultation received an overwhelming response, a majority of which were highly supportive of and positive about our proposed Sanctions Guidelines. It is important to reiterate that the ultimate objective for the FRC to impose sanctions on identified misconducts is not to punish for the sake of punishing, but to help rectify and improve less than satisfactory behaviours of auditors, thereby upholding the quality of financial reporting of listed entities in Hong Kong, safeguarding the interest of the investing public and ultimately, reinforcing Hong Kong’s status as an acclaimed international financial centre.”
AFRC imposes HK$300 million fine and six-month practice limitation on PricewaterhouseCoopers and HK$10 million in fines on its two former registered responsible persons over the Evergrande Audits
AFRC imposes HK$300 million fine and six-month practice limitation on PricewaterhouseCoopers and HK$10 million in fines on its two former registered responsible persons over the Evergrande Audits 23 April 2026 The Accounting and Financial Reporting Council ( AFRC ) has sanctioned PricewaterhouseCoopers ( PwC ) 1 and two of its former partners and registered responsible persons, Mr Cheung Siu Cheong ( Cheung ) and Mr Chow Sai Keung ( Chow ) 2 , for misconduct in connection with PwC’s audits of the consolidated financial statements of: (i) China Evergrande Group (in liquidation) (Company) (previous stock code: 03333, delisted) and its subsidiaries (collectively, the Group) for the years ended 31 December 2019 and 2020 (Evergrande Group Audits); (ii) Evergrande Property Services Group Limited (stock code: 06666) and its subsidiaries for the year ended 31 December 2020; and (iii) China Evergrande New Energy Vehicle Group Limited (stock code: 00708) and its subsidiaries for the year ended 31 December 2020 ( Evergrande Vehicle Audit ) (collectively, the Evergrande Audits ). ... In deciding the appropriate disciplinary sanctions, the AFRC has considered all the relevant circumstances, including the nature, seriousness, duration, frequency and impact of the misconduct, as well as the relevant aggravating and mitigating factors. ... Together, these sanctions send a clear message that serious departures from professional standards will not be tolerated and will be met with robust enforcement action.”
Disciplinary Cases
The Court of Appeal further ordered the regulatees to pay the AFRC’s costs of the applications. Sanctions: Public reprimands Pecuniary penalties Anthony S.L. ... The deficiencies included failures to (i) perform mandatory risk assessments, (ii) verify a person’s authority to act on behalf of a client before engagement acceptance, and (iii) carry out sanctions screening of client entities. Sanctions: Public reprimand Pecuniary penalty: HK$150,000 Press Release | Statement of Disciplinary Action 5 Mar 2026 Regulatee: Wong Ka Chun Misconduct : The CPA failed to comply with anti-money laundering requirements.
Court of Appeal dismisses applications of Chiang Sham Lam Anthony and Anthony S. L. Chiang & Co. for leave to appeal and stay of execution
These sanctions stemmed from the Regulatees’ serious breaches of fundamental auditor independence requirements over 22 years, as well as failure to maintain an effective quality control system to ensure independence. ... The Court of Appeal fully endorsed the reasoning of the AFRC’s disciplinary decision and the AFRRT’s determination, and found no basis for granting leave to appeal to interfere with the sanctions. The Court of Appeal’s refusal to grant a stay pending determination of the leave application means that the sanctions are not postponed by the Regulatees’ applications. Accordingly, the AFRC’s sanctions, including the three year suspension orders imposed on the Regulatees from 22 May 2025 to 21 May 2028, remain fully effective.
FAQs - Discipline
See also Disciplinary Sanctions . 4. What is the AFRC’s approach to sanctions? Please refer to the Sanctions Policy for PIE Auditors and Registered Responsible Persons and Sanctions Policy for Professional Persons . ... See also Disciplinary Sanctions . 6. What is the AFRC’s disciplinary process?
Discipline
Discipline Overview The AFRC takes appropriate and timely disciplinary actions in cases of misconduct by imposing commensurate sanctions for the purposes of deterrence, investor protection, maintaining market confidence in the quality of financial reporting and audits, and upholding the standards of conduct among regulatees. ... CPAs and practice units) For an understanding of the legal framework under the AFRCO, the objectives of discipline and the sanction powers of the AFRC, please refer to the Discipline Policy Statement for PIE Auditors and Registered Responsible Persons and the Discipline Policy Statement for Professional Persons . ... Explore More Disciplinary Process Understand the AFRC’s disciplinary process and our approach to cooperation Disciplinary Sanctions Learn about the possible sanctions that may arise from disciplinary action Disciplinary Cases Gain insight into past AFRC disciplinary cases and their outcomes Discipline Guidance Materials Explore More Frequently Asked Questions Explore More
AFRC takes first ever disciplinary actions against multiple practice units for non-compliance with anti-money laundering requirements and imposes fines totalling HK$290,000
In particular, Prism: did not perform mandatory risk assessments of a client to determine whether certain individuals pose a higher risk of money laundering / terrorist financing; failed to verify a person’s authority to act on behalf of a client before engagement acceptance; and did not conduct the required name checks of client entities against the United Nations Security Council’s Sanctions List ( Sanctions List ). ... In deciding the appropriate disciplinary sanctions, the AFRC has considered all relevant circumstances, including the nature and extent of non-compliance, the fact that Prism is a PIE auditor, the relatively limited frequency, duration and impact of the misconduct. ... If the situation persists, the AFRC will escalate the level of sanctions to send a clear and deterrent message to the profession that such failures are not acceptable.”