Hong Kong Accounting Regulator Says It Has Not Seen Widespread IPO Audit Quality Issues

The Accounting and Financial Reporting Council (AFRC) published its Annual Inspection Report for the year ended March 31 and its first Annual Enforcement Report, and said it has not recently seen large-scale IPO audit quality problems, according to Ming Pao. AFRC CEO Janice Lai said the regulator issued a public letter in February on IPO audit quality to provide an “ex-ante” reminder amid a surge in IPOs. Inspection head Lau Kin-yu said the letter also stated the AFRC would step up spot checks on IPO engagements. The AFRC said that of the 58 engagements inspected this year, 72% were rated in the top three categories—good, limited improvements needed, and improvements needed—unchanged from last year.