Hong Kong Exchange Tightens Rules to Avoid Auditor Shopping

Hong Kong listed companies must now obtain shareholder approval to change auditors, part of a regulatory push to bolster corporate governance and transparency in the $7.5 trillion market.

In updated guidance issued late Friday, Hong Kong Exchanges and Clearing Ltd. mandated that firms appoint or remove auditors only at general meetings. The bourse also required companies to disclose specific audit fees or ranges to prevent fee disputes from being used as a pretext for dismissal.

The move effectively closes a loophole that allowed boards to pressure auditors into resigning without immediate shareholder oversight. Under the new rules, any action by ...