The Accounting and Financial Reporting Council (AFRC) has reported continued growth in Hong Kong’s public interest entity (PIE) audit market, while urging firms to invest in talent development and technology to ensure long-term sustainability.
The findings were published in the Accounting and Financial Reporting Council’s 2026 Report on the Analysis of the PIE Audit Market in Hong Kong.
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Hong Kong’s recovery and expansion of its capital markets helped increase the number of listed companies from 2,572 in 2021 to 2,686 in 2025, according to the report.
Over the same period, the number of registered PIE auditors with PIE audit engagements rose from 41 to 51.
AFRC noted that the medium-sized firms expanded their share of PIE audit engagements from 23% in 2020 to 38% in 2024.
By contrast, the share held by large firms declined from 68% to 54%.
Large firms nevertheless continued to dominate by market capitalisation, accounting for 87% of the market in 2024, compared with 92% in 2020.
The AFRC said measures outlined in Hong Kong’s first five-year plan for economic and social development, covering 2026 to 2030, and the Chief Executive’s 2026 Policy Address may further strengthen the capital markets.
This includes attracting Mainland Chinese and overseas companies from emerging industries for listing in Hong Kong.
The anticipated expansion is also likely to increase the volume and complexity of cross-border audit work, making investment in professional skills and technology increasingly important.
The report found that about 81% of audit staff at manager level or above held professional accounting qualifications, compared with approximately 17% of associates and senior associates.
Around 24% of staff in the junior groups had not enrolled in a professional accounting qualification programme.
All large firms used technology tools across a wide range of audit processes, compared with 42% of medium-sized firms and 5% of small firms.
Meanwhile, 54% of medium-sized firms and 21% of small firms planned to increase technology investment. According to the report, the total PIE audit fees rose annually from 2021 to 2023 before falling by 4.5% in 2024.
