HKICPA Releases Statement Regarding Ernst & Young, Akai Case

The Hong Kong Institute of CPAs has released a statement regarding allegations of document tampering committed by an Ernst & Young partner in auditing Akai Holdings Limited.

 

The institute says it learned of allegations of document tampering at the time these allegations were made by lawyers for liquidators of Akai Holdings Limited during court proceedings against the accounting firm of Ernst & Young, which was the auditor of Akai.

 

According to HKICPA, Ernst & Young informed the institute of the firm’s internal investigation and undertook to keep the institute up-to-date as the case evolved. The HKICPA also says that the case falls within the investigative jurisdiction of the Financial Reporting Council which was set up in 2006 as an independent body vested with full powers to investigate irregularities in the audit and financial reporting of listed companies.

 

The FRC and the institute have been liaising with Ernst & Young and their legal advisers to understand what documents may have been falsified and identify those responsible, says the HKICPA in its statement, adding that the seizure by police on 29 September of the original audit working papers and other documents makes this matter at the same time a criminal investigation. "If charged and convicted of any criminal offence, those involved will be subject to criminal penalties," says the institute.

 

Once sufficient evidence emerges from the FRC and police investigations to show that any institute member may have been involved in the falsification of documents, the institute says it will initiate its disciplinary process.

 

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