Statutory Auditing Services in Hong Kong
Package Fee for Auditing Services
|Package Available||Fee (HKD)|
|Statutory Auditing Services (Active Company)||From HK$5,000|
According to the Companies Ordinance of Hong Kong, it is a mandatory requirement for all Hong Kong companies to file a Hong Kong Statutory Audit (which is conducted according to Hong Kong Financial Reporting Standards (“HKFRS”) or SME-FRE in the case of Small-Medium Sized Enterprises (“SMEs”)). For taxation purpose, companies Incorporated in Hong Kong need submit their audited financial statements with their Profits Tax Return to the Inland Revenue Department.
What is Statutory Audit?
Statutory Audit is one type of compulsory auditing as mandated by Hong Kong’s Law and it is one of the on-going compliance requirements for Hong Kong companies. Every Hong Kong-incorporated company must appoint qualified and independent auditors to perform yearly statutory audits on their accounts.
For a newly incorporated company, its director(s) may appoint its first auditor at any time before the first Annual General Meeting (“AGM”) which should be held within 18 months from the date of its incorporation.
For public listed companies and larger Multinationals (“MNCs”), these companies must prepare a more comprehensive “Directors’ Report” that includes a “business review”. The business review provides information about the company’s environmental policies and an account of the company’s relationship with its employees.
The Auditor’s Eligibility, Roles, and Responsibility
- The auditor must be a Certificated Public Accountant (“CPA”) qualified under the Professional Accountants Ordinance and must hold a Practicing Certificate issued by the Hong Kong Institutes of Certified Public Accountants (“HKICPA”).
Note: The HKICPA is the sole licensed entity that is able to register and certify public accountants in Hong Kong.
- The auditors must report to the company’s shareholders on the audited financial statements audited, including consolidated financial statements (where applicable), laid before the AGM of the company.
- The auditors must report whether or not the financial statements show a true and fair view, and it is comply with the Companies Ordinance and other laws applicable to certain regulated industries.
- The auditors have to comply with certain auditing guidelines applicable to specific circumstance.
- For non-Hong Kong companies, the audits of financial statements may be conducted in accordance with international auditing standards.
- The auditors must comply with the code of ethics, particularly the independence requirements.
Information Required for Auditing
- The annual financial statements that include the income statement, balance sheet, and cash flow statement.
- The accounting record in the fiscal year that includes bank statements, contracts, expense invoices and receipts, etc.
- The complete list of affiliated companies and affiliated persons
- Other information as and when needed
Process of Auditing
- Draft the auditing plans
- Understand and make remarks/suggestions on the internal controlling system of the company,
- Assemble and record relevant information
- Compliance testing
- Substantive control
- Draft the auditing report and forward to the company (that has been audited)
3E Accounting’s Statutory Auditing Services
Our associated auditors conduct annual audits in accordance with Hong Kong Financial Reporting Standards (HKFRSs) or International Financial Reporting Standards (IFRSs). Our associated auditors conduct auditing on the profit and loss statement, balance sheet, and relevant receipts according to the auditing standards.
Our associated auditors will comment on whether the accounting system formulated by the company complies with the regulations and its effectiveness in the actual application process. At the same time, our associated auditors will also advise clients of relevant legal requirements and their compliance.
Our associated auditors’ experienced team of audit service professionals will work with your company staff to gather all the necessary records and make sure that they are in a good order as required by the regulatory authorities. Contact us today for obtaining an audit quotation for your Hong Kong company.