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The FRC adopted an investigation report finding that the auditor (the Auditor) of a listed entity (Listed Entity) failed to:

(a)       appropriately address an identified misstatement in the measurement of consideration payable for the acquisition of a subsidiary in the consolidated financial statements of a Listed Entity for the year ended 31 March 2017 (the Relevant Financial Statements); and

(b)       appropriately exercise professional judgement in determining materiality for the financial statements as a whole.

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.

The investigation was initiated on 6 September 2018, following referral by a regulator in March 2018.  

For details, please click here.