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On 12 August 2021, the FRC adopted an investigation report in relation to a failure by the auditor (the Auditor) of a listed entity (Listed Entity) to identify a material misstatement in relation to the impairment assessment of an available-for-sale equity investment (the Investment) in the consolidated financial statements of the Listed Entity for the year ended 31 March 2017 (the 2017 Financial Statements). This is the second investigation report completed using audit working papers obtained with the assistance of the Supervision and Evaluation Bureau (SEB) of the PRC Ministry of Finance under the FRC’s Memorandum of Understanding with the SEB.

Under the transitional provisions of the amended FRC Ordinance, since the relevant audit was completed before 1 October 2019, the investigation report has been referred to the Hong Kong Institute of Certified Public Accountants to determine if any disciplinary actions are warranted. Names of the relevant parties are being withheld at this time to avoid prejudicing any related disciplinary proceedings. For details, please click here.