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Complaints
1. The Financial Reporting Council (FRC) is charged with a statutory duty to receive and, if appropriate, investigate and enquire into complaints from the public relating to possible auditing and reporting irregularities committed by auditors and reporting accountants of listed entities and possible non-compliance with relevant financial reporting requirements on the part of listed entities in their financial reports.
2. In order to evaluate a complaint, the FRC requires accurate and complete information from the complainant, which should include:

(a) name of the auditor, reporting accountant and listed entity;
(b) specific details of the events or subject matters indicating the relevant irregularity or non-compliance, including the dates and parties involved;
(c) name, postal and email addresses and contact telephone numbers of the complainant; and
(d) copies of any relevant documents providing evidence in support of the complaint.

The FRC may not be able to proceed with complaints which are not supported with sufficient evidence. Complaints made anonymously may delay the FRC’s review and processing, and would also make it difficult or impossible to obtain the necessary information and supporting evidence.

How does the FRC handle a complaint?

3. Upon receipt of a complaint, the FRC issues an acknowledgement to the complainant.
4. All complaints are dealt with as soon as practicable. The period of time required for handling a complaint depends on the circumstances of each individual case.
5. All complaints are treated in strict confidence although the FRC may need to disclose information to other regulatory bodies and/or law enforcement agencies. Such disclosures are, however, made under the confidentiality provisions of the Financial Reporting Council Ordinance (FRCO).
6. In reviewing a complaint, the FRC may need to contact the complainee in order to obtain further information. Details of the complaint may have to be disclosed to this party, but, it is the FRC’s policy that the identity of a complainant shall not be revealed to outside parties unless the complainant identifies himself to the public or consents to such disclosure.

Reviewing and assessing complaints

7. To decide whether or not an investigation or enquiry should be initiated, the information and evidence provided by the complainant is reviewed.
8. The complainant, auditor, reporting accountant and/or listed entity concerned may be asked to provide additional information and an explanation of the matters referred to in the complaint.
9. Following an assessment of the information and evidence available, the FRC will decide on the appropriate action to be taken. This may include initiating an investigation or enquiry, referral of the case to the appropriate regulatory bodies and/or law enforcement agencies, no further pursuit of the complaint and/or any other action considered appropriate by the FRC.
10. Where it appears that there are circumstances suggesting or there is reasonable cause to believe that there is or may be a relevant irregularity, the FRC may initiate an investigation. Where it appears that there is or may be a question whether or not there is a relevant non-compliance, the FRC may initiate an enquiry.
11. Where there is insufficient information to support a complaint, or the subject matter of the complaint is immaterial, falls outside the remit of the FRC, or is not related to a relevant irregularity or non-compliance, the FRC may take such action as it considers appropriate. This may include no further pursuit of the complaint or referral of the case to an appropriate authority.

How can the status of a complaint be checked?

12. A complainant will be notified in writing with brief reasons if the FRC decides not to pursue his complaint. If the complainant is not satisfied with the FRC’s decision, the complainant may request a review.
13. If an investigation or enquiry is initiated, no information will be disclosed during the progress of the case. This enables the FRC to conduct its investigation or enquiry on a confidential basis. It also preserves the integrity of the process and protects the auditor, reporting accountant and listed entity concerned during the course of the investigation or enquiry.
14. If the review of a complaint lasts for more than 12 calendar months, the FRC will update the complainant on the progress of the review provided that it does not violate the confidentiality provisions under the FRCO.
15. On completion of review and assessment of complaints or on completion of an investigation or enquiry, if no relevant irregularity or non-compliance is found, complainants will be informed that no further action is to be taken by the FRC. If the complainant is not satisfied with the FRC’s decision, the complainant may request a review. Complainants will be informed if the FRC refers the matter to other regulatory body for follow-up action, but no other details will be provided.
16. In deciding whether or not to publish an investigation or enquiry report, or any part of a report, the FRC shall consider:-

(a) whether or not the publication may adversely affect any criminal proceedings or any proceedings before the Market Misconduct Tribunal or under the Professional Accountants Ordinance that have been or are likely to be instituted;
(b) whether or not the publication may adversely affect any person named in the investigation or enquiry report; and
(c) whether or not the investigation or enquiry report, or any part of the report, shall be published in the interest of the investing public or in the public interest.

Page last updated: 21 January 2016