The AFRC’s article, “Safeguarding Auditor Independence,” addresses concerns about potential threats to auditor independence related to procurement and purchases from audit clients. It emphasizes the need for audit firms to manage client relationships carefully and adopt robust procedures to mitigate independence risks. CEO Janey Lai stresses that these transactions, often seen as low-risk, can significantly impact audit quality if not properly managed. The article outlines four key principles for audit firms: promoting ethical governance, establishing comprehensive independence policies, monitoring threats, and conducting diligent investigations. It also calls for audit committees to proactively oversee auditors, ensuring fair treatment and enhancing trust in Hong Kong’s capital market.
Resources: https://www.afrc.org.hk/media/fhcbw5hp/independence-article_press-release_eng.pdf
