Under the AFRCO, the AFRC has the power to impose disciplinary sanctions on PIE auditors and registered responsible persons where there has been FR misconduct in relation to PIE engagements completed on or after 1 October 2019.

In relation to PIE engagements completed before 1 October 2019, the AFRC also has the power to impose disciplinary sanctions.  However, the auditor or the reporting accountant concerned is to be regarded as a professional person and the AFRC can only impose sanctions that are applicable to professional persons in these cases.

In exercising the power to impose a pecuniary penalty on PIE auditors and registered responsible persons, the AFRC shall have regard to the Guidelines for Exercising the Power to Impose a Pecuniary Penalty for PIE Auditors and Registered Responsible Persons.

For the AFRC’s general approach in determining sanctions against PIE auditors and registered responsible persons, for more information, please refer to the Sanctions Policy for PIE Auditors and Registered Responsible Persons.

Upon the commencement of the Financial Reporting Council (Amendment) Ordinance 2021, the AFRC’s disciplinary powers have been expanded to cover professional persons (i.e. CPAs and practice units), in addition to its existing powers over PIE auditors and registered responsible persons.

In exercising the power to impose a pecuniary penalty on professional persons, the AFRC shall have regard to the Guidelines for Exercising the Power to Impose a Pecuniary Penalty for Professional Persons.

For the AFRC’s general approach in determining sanctions against professional persons, for more information, please refer to the Sanctions Policy for Professional Persons.

The AFRC takes cooperation into consideration when determining sanctions and may reduce the sanctions as appropriate in light of all the circumstances of the case.  Guidance Note on Cooperation with the AFRC explains and provides guidance on the AFRC’s approach to cooperation during investigations and disciplinary actions.