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The Accounting and Financial Reporting Council (AFRC) today issued an open letter to all public interest entity (PIE) auditors acting as reporting accountants for entities seeking to list their shares on the Stock Exchange of Hong Kong (i.e., initial public offerings or IPOs).

The recent surge in IPO activities has further underscored the pivotal role of PIE auditors in driving the growth and dynamism of Hong Kong’s capital markets. However, this trend has also presented unprecedented challenges in maintaining highquality audits. In light of this, the AFRC has expressed concerns over the rapid increase in IPO audit engagements, through its open letter. The letter reminds PIE auditors of their critical responsibilities, which include safeguarding audit quality, upholding professional independence and integrity, and reinforcing public trust in Hong Kong’s capital markets.

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