The SFC, the AFRC and HKEX issued a joint statement on Oct. 8 on listed companies whose accounts draw a going concern “disclaimer of opinion” from their auditors. They warned that, unless there is clear improvement, the exchange will consider amending the Listing Rules where necessary, including requiring the issuers concerned to suspend trading (China Daily Hong Kong edition, HKEX announcement, The Standard). On the numbers, such cases rose from 12 in 2017 to 95 in 2025; 65 companies have stayed in this state for more than a year, and the most extreme case has lasted 14 consecutive years (China Daily Hong Kong edition, citing Bloomberg). The background is that in 2019 HKEX rules introduced a requirement for trading suspension when an auditor issues a “disclaimer of opinion” or an “adverse opinion,” but exempted a disclaimer arising purely from going concern problems, to avoid companies in difficulty being suspended for long periods. Regulators now take the view that an auditor who disclaims an opinion even only on going concern is in effect unable to give an opinion on the accounts as a whole, which weakens their reliability (China Daily Hong Kong edition). The statement sets out expectations for each party: management should assess its ability to continue as a going concern using reasonable assumptions and a feasible action plan, audit committees must scrutinize the assessment closely, and auditors must challenge it and explain why they disclaim an opinion (HKEX announcement). The rules have not been amended so far; the statement is a warning.
Accounts are the basis on which investors judge a company. If an auditor cannot give an opinion for several years running, investors struggle to know the company’s true condition; yet suspension leaves shareholders unable to trade, and the balance between the two is the heart of regulation.
Investors in small caps or suspended shares should watch company announcements and auditors’ opinions; if the rules are amended, such companies could face a stricter risk of suspension or delisting.
Regulators take the view that a disclaimer of opinion weakens the reliability of accounts, and that the rules should be tightened to protect investors.
Others worry that suspending every such company would leave shareholders unable to cash out for long periods, which would be unfair to companies in difficulty that still have a chance of restructuring; that is why the exemption was created in 2019.
What to watch is whether HKEX actually issues a consultation paper, amends the Listing Rules, and what transitional arrangements apply. For now this is only a warning, not a new rule; we do not predict the outcome.
China Daily Hong Kong edition · HKEX announcement · The Standard · The Edge Malaysia (Oct. 8)
SFC, AFRC and HKEX jointly warn: for companies whose auditors issue a “disclaimer of opinion,” rules may change to require trading suspension
Such cases rose from 12 in 2017 to 95 in 2025; 65 of the companies have not shaken off the status in more than a year, the longest for 14 years in a row.
The SFC, the AFRC and HKEX issued a joint statement on Oct. 8 on listed companies whose accounts draw a going concern “disclaimer of opinion” from their auditors. They warned that, unless there is clear improvement, the exchange will consider amending the Listing Rules where necessary, including requiring the issuers concerned to suspend trading (China Daily Hong Kong edition, HKEX announcement, The Standard). On the numbers, such cases rose from 12 in 2017 to 95 in 2025; 65 companies have stayed in this state for more than a year, and the most extreme case has lasted 14 consecutive years (China Daily Hong Kong edition, citing Bloomberg).
The background is that in 2019 HKEX rules introduced a requirement for trading suspension when an auditor issues a “disclaimer of opinion” or an “adverse opinion,” but exempted a disclaimer arising purely from going concern problems, to avoid companies in difficulty being suspended for long periods. Regulators now take the view that an auditor who disclaims an opinion even only on going concern is in effect unable to give an opinion on the accounts as a whole, which weakens their reliability (China Daily Hong Kong edition). The statement sets out expectations for each party: management should assess its ability to continue as a going concern using reasonable assumptions and a feasible action plan, audit committees must scrutinize the assessment closely, and auditors must challenge it and explain why they disclaim an opinion (HKEX announcement). The rules have not been amended so far; the statement is a warning.