China Frontier Technology Group has confirmed the appointment of Prism Hong Kong Limited as its new external auditor for the financial year ending 31 December 2025, replacing Infinity CPA Limited, which resigned citing heightened “professional risk” linked to the Group’s newly added trading of functional materials segment.\n\nInfinity’s withdrawal was attributed to a surge in audit workload and the firm’s assessment that it lacked sufficient internal capacity to cover additional procedures within the agreed fee. The board emphasised that the departure involved no disagreement over accounting matters and raised no red-flag issues regarding the Group’s financial reporting.\n\nUnder the new engagement, China Frontier Technology will pay Prism an audit fee of HKD 0.75 million, versus the HKD 0.85 million previously quoted by Infinity. Both firms proposed comparable total audit hours—around 1,200—though Prism plans to absorb first-year onboarding work through efficiencies in its risk-oriented methodology rather than extra billable hours. Approximately 80 % of the fee relates to PRC operations, with the remaining 20 % for Hong Kong activities; cost allocation across segments is split 40 % to event services and marketing, 20 % to sports services and 40 % to the new trading business.\n\nPrism’s staffing model will deploy 80 partner hours, 325 manager hours, 360 senior hours and 480 audit-assistant hours, mirroring Infinity’s proposed labour mix. The Audit Committee stated that the revised fee reflects operational efficiencies and resource deployment differences, not reduced scope or quality.\n\nDue diligence focused on Prism’s competence, independence and regulatory standing. The firm audits more than 70 Hong Kong-listed companies and will field an engagement leadership team with over 15 years of experience. Although the Accounting and Financial Reporting Council (AFRC) issued press releases in September 2025 and March 2026 citing historical administrative breaches related to registration and anti-money-laundering compliance, the Audit Committee concluded that these matters were non-dishonest, had been remediated and did not impair Prism’s current capability. A recent AFRC inspection reportedly returned a satisfactory rating with no significant findings.\n\nThe Audit Committee confirmed that Prism will not engage a component auditor, will apply a risk-oriented audit approach and has provided a detailed timetable covering risk assessment, control testing and substantive procedures. The Board and the Audit Committee both consider Prism “independent, competent and capable of delivering a high-quality audit,” and assert that audit quality will not be compromised under the new arrangement.\n\nAll other details disclosed in the Company’s previous announcements of 18 December 2025 and 27 January 2026 remain unchanged.
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