AFRC raises audit quality concerns amid surge in Hong Kong IPOs

The Accounting and Financial Reporting Council (AFRC) has issued an unfastened missive to each nationalist involvement entity (PIE) auditors that service arsenic reporting accountants for companies preparing to database connected the Stock Exchange of Hong Kong.

The regulator said the latest question of archetypal nationalist offerings (IPOs) has further underscored the relation of PIE auditors successful driving the “growth and dynamism” of Hong Kong’s superior markets.

At the aforesaid time, the AFRC warned that this acceleration has created unprecedented challenges successful maintaining high-quality audits.

It stresses that PIE auditors person a cardinal relation to play successful protecting audit quality, maintaining independency and integrity, and supporting nationalist assurance successful Hong Kong’s superior markets.

The AFRC besides noted that immoderate companies person accepted an exceptionally precocious measurement of IPO engagements connected apical of their existing PIE work.

The missive said that this enlargement raises superior questions astir whether these auditors person the requisite competencies and capabilities to diligently fulfil their nonrecreational responsibilities without compromising audit quality.

The assembly besides sets retired what it expects from PIE auditors progressive successful listings, and reiterates that their enactment is indispensable to the reliability of fiscal reporting and the credibility of the market.

Among these expectations is simply a request to enactment audit prime and integrity supra each different considerations.

Auditors are besides expected to show that they person capable method expertise and manpower for IPO assignments, unneurotic with a committedness to sustainable resources absorption to support audit quality.

The AFRC besides pointed to PIE auditors’ captious relation arsenic the engagement spouse and engagement prime reviewer.

It urged PIE auditors to instantly undertake a thorough valuation of their resources and critically measure whether they person the indispensable competencies and capabilities to present high-quality audits for their existing and caller IPO engagements.

The regulator volition besides inquire companies to supply an updated docket of their existent IPO projects, immoderate intentions to judge further IPO appointments, and accusation connected however these engagements are resourced.

The AFRC said it volition intimately show however PIE auditors are managing their increasing portfolios portion maintaining audit quality, independence, integrity and professionalism.

It added that practices that autumn abbreviated of its expectations should expect heightened scrutiny and regulatory intervention.

"AFRC raises audit prime concerns amid surge successful Hong Kong IPOs" was primitively created and published by The Accountant, a GlobalData owned brand.