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The Accounting and Financial Reporting Council (AFRC) has today published the 2024 Annual Investigation and Compliance Report (Annual INC Report) which provides an operational overview of our investigation and enquiry functions and highlights our significant findings and observations from concluded and ongoing investigations and enquiries. 

In the reporting period ended 31 March 2024, the AFRC received a record total of 190 pursuable complaints, of which 67% were assessed and completed. In addition, 130 sets of financial statements were selected for review under the Financial Statements Review Program. The assessments of complaints and reviews of financial statements resulted in the initiation of 77 investigations and 14 enquiries.

Ms Janey Lai, CEO of the AFRC, said, “Our investigation revealed that misconduct and non-compliance generally stem from a disregard for good governance. Identifying the root cause is the first step to addressing misconduct, which includes examining the corporate governance of firms and companies and ensuring a proper tone has been set by the leadership that emphasises the importance of fostering a culture of quality auditing. Promoting governance at the fundamental level is key for maintaining public trust in financial reporting as well as for the healthy development of the accounting profession.”

Dr Kelvin Wong, Chairman of AFRC, said, “With our persistent effort since 2019, we are encouraged to observe initial signs of improvement in the quality of financial reporting and auditing. It is imperative for the leaders of the accounting profession to cultivate a firm-wide culture of effective governance, compliance, and continuous learning that is conducive to improvement in audit quality. Robust governance and market development are complementary. They solidify public trust on the accounting profession, and thereby create positive ripple effects that will reinforce Hong Kong’s standing as a leading international financial centre.”

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