The Hong Kong Securities and Futures Commission (SFC) published Chairman Kelvin Wong’s remarks at the Forum of Firms’ Regional Audit Quality Symposium, emphasizing that reliable audits depend on independent judgment, adequate resources and a culture that supports challenging management. Audit quality is part of capital market infrastructure, underpinning investors’ ability to rely on financial reporting. Standards, controls and technology cannot substitute for professional responsibility when commercial pressure or difficult judgments arise.
Hong Kong’s market structure places particular demands on auditors and corporate governance. At the end of October 2026, mainland enterprises represented 60% of listed companies and 77% of market value, requiring auditors to understand how information, authority and controls operate across jurisdictions. Concentrated ownership and thin trading among smaller issuers can also reduce external scrutiny, increasing minority shareholders’ dependence on internal governance and independent assurance. Audit committees and independent non-executive directors need to challenge management rather than assume another gatekeeper will do so. Director remuneration should attract sufficient expertise and time without compromising independence.
For audit firms, capacity depends on partner attention, experienced judgment and access to specialists, not simply staff numbers. Technology gains should partly support deeper analysis and quality control rather than automatically translate into more engagements, while global networks need to make their expertise accessible to local teams. Firm incentives and leadership practices must support escalation when evidence is insufficient or conclusions threaten a client relationship. Artificial intelligence does not transfer accountability away from auditors: responsible professionals need enough technological understanding to challenge a system’s inputs, assumptions and limitations before relying on its conclusions.