AFRC completes 22 disciplinary cases last year, emphasizes importance of accuracy

The Accounting and Financial Reporting Council completed 81 investigation and enquiry cases, and 22 disciplinary cases for the year ended March 31, according to the council’s Annual Inspection Report and inaugural Annual Enforcement Report released Tuesday.
David Sun, chairman of the AFRC, highlights that significant financial misstatement or auditing error could mislead investment decisions, increase financing costs, weaken market confidence, and even increase systemic risks. 
Pecuniary penalties exceed HK$11.7 million in total. Other sanctions included public reprimands and suspension of registration and cancellation of practising certificates. 
Serious forms of auditor misconduct include deficient systems of quality management and control, significant audit deficiencies and inappropriate audit opinions, non-compliance with registration requirements, breach of auditor independence requirements, and non-compliance with certain guidelines. 
The AFRC emphasized that companies have a responsibility to ensure the accuracy of the financial information disclosed, as the market relies on this information to make investment decisions.
The council has conducted inspections of 39 audit firms and a selection of 90 completed audit engagements over the past year, including 58 listed-entity audits completed by 25 public interest entity auditors. 
Among such, 72 percent require no more than improvements, the same level as the year before.

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