The AFRC acquires information about potential non-compliance from various sources and assess any such information to determine whether to initiate an enquiry by identifying any potential non-compliance and determining whether the evidence meets the relevant threshold for initiating an enquiry under the Accounting and Financial Reporting Council Ordinance (AFRCO). If the AFRC concludes that an enquiry is warranted and the evidence meets the relevant threshold for the purpose of initiating an enquiry under the AFRCO, the AFRC will initiate an enquiry.

When conducting an enquiry, the enquirer may exercise its enquiry powers under the AFRCO. Such powers include, among other things, requiring any specified persons to produce relevant records and documents and to provide information and explanations.

The enquirer will prepare a written enquiry report on the findings of the enquiry after the enquiry has been completed.

If the AFRC considers that any person named in the enquiry report (“Named Person”) would in the event of a publication or other disclosure of the report be adversely affected by the publication or disclosure, the enquirer must, before the report is adopted by the AFRC, first give the Named Person a reasonable opportunity of being heard.

The AFRC may, in relation to the enquiry after taking into account the enquiry report:

(a) close the case without further action;
(b) suspend the enquiry for such period as the AFRC thinks fit;
(c) secure the removal of the non-compliance in accordance with Division 4 of Part 4 of the AFRCO; or
(d) carry out such other follow-up action in accordance with the AFRCO as the AFRC thinks fit.