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This is the AFRC’s first settlement case concerning audit deficiencies by a listed entity auditor, and the first direction for additional Continuing Professional Development (CPD) in a disciplinary case.

The AFRC has (a) reprimanded each of BDO Limited, Mr Lo Ngai Hang (Lo) and Mr Lam Hung Yun Andrew (Lam), (b) imposed pecuniary penalties against them totalling HK$1,456,000, and (c) directed each of Lo and Lam to undertake additional CPD hours, for their multiple breaches of auditing standards in relation to the audits of a Hong Kong listed company, China Water Affairs Group Limited, and its subsidiaries for the years ended 31 March 2011 to 31 March 2016.

The regulatees fully accepted their breaches and the disciplinary sanctions and direction for additional CPD, and reached an early settlement with the AFRC.  In light of the regulatees’ cooperative attitude, the AFRC has exercised its discretion under the Guidance Note on Cooperation with the AFRC and reduced the pecuniary penalties by 30%.

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