Irregularities and Non-compliances > What is a "relevant irregularity"?
The FRC may initiate an investigation into a possible relevant irregularity.
Relevant irregularity means an auditing or reporting irregularity. It is defined in section 4 of the Financial Reporting Council Ordinance (the “FRC Ordinance”).
An auditing or reporting irregularity exists if an auditor in respect of the audit of the financial statements of a listed entity or a reporting accountant in respect of the preparation of an accountants’ report required for a listing document:-
(a)
falsified or caused to be falsified a document;
(b)
made a statement, in respect of a document, that was material and that he knew to be false or did not believe to be true;
(c)
has been negligent in the conduct of his profession;
(d)
has been guilty of professional misconduct;
(e)
did or omitted to do something that would reasonably be regarded as bringing or likely to bring discredit upon the auditor or reporting accountant himself, the Hong Kong Institute of Certified Public Accountants (“HKICPA”) or the accountancy profession;
(f)
failed to comply with a professional standard i.e. any (a) statement of professional ethics; or (b) standard of accounting, auditing and assurance practices, as issued or specified by the council of the HKICPA from time to time;
(g)
failed to comply with the provisions of any bylaw or rule made or any direction lawfully given by the council of the HKICPA.
Please note the above is not an exhaustive list. For further information, please refer to section 4 of the FRC Ordinance.
