AFRC chief says governance starts with character, not just AI
David Sun, chairman of the Accounting and Financial Reporting Council, told a regulatory forum that sound market governance depends on character, integrity and accountability, not just technology. He proposed five pillars for governance and cited a study showing a gap in staff awareness of internal
David Sun, chairman of the Accounting and Financial Reporting Council (AFRC), stressed at the annual AFRC Regional Regulatory Forum that sound market governance at institutional levels is essential to safeguard investor trust. He highlighted the importance of character, integrity and accountability within firms' operations.
In an era of artificial intelligence, Sun emphasised that human accountability remains paramount, stating that technology should be deployed to sharpen professional judgment rather than replace it. He proposed five essential pillars for governance, which he called the “five Cs”: character, capability, capacity, consistency and correctability.
Sun said robust governance and reliable financial reporting are not just technical exercises but the foundation of market confidence and capital retention in Hong Kong, as mainland China moves forward with its 15th Five-Year Plan and Hong Kong advances its first Five-Year Plan. “Opportunity attracts capital, good governance earns confidence, and trust keeps capital here,” he said.
He also pointed to a recent AFRC study of Hong Kong’s 16 largest public interest entity (PIE) auditors. The study revealed that while nearly two-thirds of partners said their firms had designated channels to raise concerns, only one-third of staff were aware of those arrangements. Sun urged firms and auditors to examine their operations.
