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The Accounting and Financial Reporting Council (AFRC) today issues an open letter  to all public interest entity (PIE) auditors to express its growing concern over the surge in number of PIE auditors resigning just one month before or even after the end of the reporting period of a listed entity.

Audit quality may be compromised by late auditor resignations because the incoming auditor will have limited time to plan and conduct a proper audit in order to meet the listed entity’s deadline to announce their audited results.

Dr Kelvin Wong, Chairman of the AFRC remarked, “PIE auditors are the gatekeepers to ensure quality financial reporting and thus enhance public trust in the Hong Kong capital market. By issuing open letter, we hope to remind the auditors and their listed clients of their respective roles and responsibilities, to share our expectations on them, and to pre-empt possible compromise or trade-off of audit quality. We urge PIE auditors to adopt a proactive attitude in addressing our grave concerns in relation to the late changes in auditor appointments and to maintain a close and effective dialogue with audit committees of listed entities in resolving any contentious audit matters. This will help ensure audit quality and protect the public interest.” 

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