AFRC fines Mazars, Grant Thornton for breaching archiving rules

Hong Kong’s Accounting and Financial Reporting Council (AFRC) has penalised Forvis Mazars (Mazars) and Grant Thornton Hong Kong for breaching audit record archiving rules.

In disciplinary decisions announced by the regulator, Mazars was publically reprimanded and ordered to wage a punishment of HK$1.4m ($179,297).

Additionally, the institution has besides been directed to carnivore the AFRC’s probe costs and expenses.

Grant Thornton received a higher monetary sanction, with the AFRC imposing a punishment of HK$2.32m, alongside an bid to screen the regulator’s probe costs and expenses.

The AFRC said some companies committed wide breaches of the 60-day archiving request and had deficiencies successful their prime power and absorption systems.

According to the regulator, 96 of Mazars’ engagements were near unarchived for much than a year. At Grant Thornton, 303 engagements were unarchived for implicit a year, including 44 that remained unarchived for much than 3 years.

Furthermore, Grant Thornton submitted inaccurate breach data, including successful effect to the AFRC’s statutory requests to verify and reconcile it. The AFRC said this unnecessarily prolonged the investigation, truthful it applied lone a 10% simplification to the penalty.

Mazars and Grant Thornton Hong Kong admitted the lapses and person accepted the AFRC’s disciplinary enactment successful full.

AFRC Investigation and Compliance caput Denis Cheng and AFRC Discipline caput Hester Leung said: “These cases are superior and of sedate concern. Timely archiving of audit documentation is simply a cardinal work of auditors and an indispensable constituent of audit quality.

“Firms indispensable found and support robust systems of prime absorption and controls, supported by capable and due resources, to guarantee owed compliance with audit standards.

"Otherwise, it severely undermines the firm’s credibility and erodes nationalist assurance successful the profession.”

"AFRC fines Mazars, Grant Thornton for breaching archiving rules" was primitively created and published by The Accountant, a GlobalData owned brand.

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