AFRC sanctions auditors over registration failures and breaches

Hong Kong’s Accounting and Financial Reporting Council (AFRC) has issued disciplinary decisions successful 3 cases concerning breaches of statutory registration obligations and failures to conscionable auditor independency standards.

In the archetypal case, the AFRC acted against Jon Gepsom and 2 practitioners linked to the firm, Wong Ka Bo, Jimmy (Wong) and Lo Ka Ki (Lo), implicit their enactment connected the audit of a Hong Kong-listed company’s consolidated fiscal statements.

The regulator identified breaches of mandatory registration provisions and shortcomings successful maintaining auditor independency successful the case.

The 2nd lawsuit is connected to the aforesaid audit engagement and centres connected practitioner Tang Wai Leung (Tang). According to the regulator, Tang acted arsenic an outer Engagement Quality Control Reviewer (EQCR) for that audit without holding the required registration.

The AFRC besides concluded that Tang failed to comply with the independency rules portion performing the EQCR role.

The 3rd substance involves Yeung Chi Fai (Yeung), a certified nationalist accountant practicing nether his ain name.

The AFRC recovered that Yeung signed audit reports for 15 backstage companies without a valid practising certificate, contrary to statutory registration requirements.

Yeung besides audited the fiscal statements of six backstage companies for which helium was serving arsenic institution secretary, which the regulator determined to beryllium a breach of independency provisions.

Financial penalties crossed the 3 matters magnitude to HK$546,000.

In the archetypal case, the AFRC imposed fines totalling HK$315,000 (around $40,259), portion Tang successful the 2nd lawsuit received a punishment of HK$70,000.

Yeung was ordered to wage HK$161,000.

Tang and Yeung were additionally directed to reimburse the AFRC’s probe costs and related expenses.

AFRC Investigation and Compliance caput Denis Cheng said: “Independence is 1 of the cardinal ethical principles for nonrecreational accountants.

“Auditors indispensable stay vigilant and instrumentality due steps to identify, measure and code self-interest and self-review threats, including threats which originate from relationships of individuals astatine the steadfast and web firms.”

Recently, the AFRC fined Forvis Mazars (Mazars) and Grant Thornton Hong Kong for violating audit record archiving requirements.

"AFRC sanctions auditors implicit registration failures and breaches" was primitively created and published by The Accountant, a GlobalData owned brand.

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