[Accounting Regulation] Appeals Court Dismisses Application for Permission to Appeal by Chiang Sen-lin and Chiang Sen-lin Accountants; Upholds Decision to Temporarily Suspend Registration for 3 Years and Impose HK$500,000 Fine

The Court of Appeal ruled on March 12, 2026, dismissing multiple legal applications filed by Jiang Senlin and his accounting firm. They initially sought permission to appeal the decision made by the Review Tribunal for Accounting and Financial Reporting (Review Tribunal) in May 2025, and hoped to suspend the disciplinary action issued by the Financial Reporting Council (FRC) in 2024 during the appeal process. However, the Court of Appeal ultimately rejected these requests and ordered the regulated party to pay the legal costs incurred by the FRC in handling this case.

Serious Violations Spanning 22 Years: Audit Independence Completely Undermined

The core of this severe disciplinary action stems from the regulated party’s long-term disregard for professional standards. The FRC’s investigation revealed that from 1999 to 2021, Jiang Senlin and his accounting firm engaged in extremely serious conflicts of interest while auditing the financial statements of five private companies. The investigation showed that Jiang and his family members held key positions such as directors and company secretaries in these audited companies at different times, and held direct financial interests. This 22-year-long neglect of auditor independence requirements and failure to establish effective quality control measures were deemed serious breaches of professional ethics.

Immediate Effect of the Ruling: Suspension of Registration until 2028

The Court of Appeal explicitly stated that the FRC’s disciplinary decision and the Review Tribunal’s ruling are well-founded, leaving no room for intervention. Since the Court of Appeal refused to grant a stay of execution, the regulated party’s legal actions could not delay the enforcement of the disciplinary measures. As a result, all disciplinary sanctions against Jiang Senlin and his accounting firm remain in effect, including a three-year suspension of registration from May 22, 2025, to May 21, 2028, cancellation and a three-year prohibition from issuing practice certificates, a public reprimand, and a total fine of HKD 500,000.

FRC: Defending the Integrity and Cornerstone of the Accounting Profession

Ms. Leung Wai-shan, head of the FRC’s Disciplinary Department, responded that the Court of Appeal’s ruling confirmed that the FRC’s disciplinary decision was well-founded and entirely appropriate. She emphasized that auditor independence is the cornerstone of audit quality, and the FRC will continue to take decisive actions to uphold the integrity of the accounting profession.