News Centre

On 14 April 2022, the FRC adopted an investigation report which found that the auditor (the Auditor) of a listed entity (the Listed Entity) failed to identify material misstatements in relation to:

1. the accounting of the Listed Entity's equity interest in an investee (Investee A) in the consolidated financial statements for the years ended 31 December 2013 (the 2013 Financial Statements) and 31 December 2014 (the 2014 Financial Statements); and
   
    
2. the non-consolidation of a wholly-owned subsidiary (Investee B) which carried on a referral business (the Referral Business) in the 2014 Financial Statements.
   
    
   Under the transitional provisions of the amended FRC Ordinance, since the relevant audits were 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.
   
   The FRC had previously adopted, on 16 January 2019, an enquiry report in relation to the material misstatements of the Group's interests in Investee A and Investee B in the 2013 Financial Statements and the 2014 Financial Statements. We did not issue a press release at that time to avoid prejudicing the related ongoing investigation. In light of the findings of the enquiry, on 21 January 2019, the FRC required the Listed Entity to remedy the misstatements by retrospectively adjusting the opening balances and the comparative figures of the Listed Entity in the latest consolidated financial statements to be issued. The Listed Entity was subsequently delisted and has not since published any financial statements.
   
   For details, please click here.