The Accounting and Financial Reporting Council (AFRC) has sanctioned BDO Limited and two of its directors, Mr. Lo Ngai Hang and Mr. Lam Hung Yun Andrew, for serious audit breaches during audits of China Water Affairs Group Limited from 2011 to 2016. The sanctions include a public reprimand, fines totaling HK$1.456 million, and additional Continuing Professional Development (CPD) hours for the individuals involved. The breaches involved failures in auditing standards, insufficient professional skepticism, and material misstatements in financial statements. The AFRC reduced penalties by 30% due to the regulatees’ cooperation. This marks the AFRC’s first disciplinary case involving CPD directions and emphasizes the need for rigorous audit standards to maintain public trust.
Resources: https://www.afrc.org.hk/en-hk/news-centre/news/afrc-reprimands-bdo-limited-and-two-others-for-serious-audit-breaches-imposes-fines-totalling-hk-1456-million-and-gives-its-first-direction-for-additional-cpd-in-disciplinary-case/
