Due to strong incentives (including taxation, misselling and other forms of fraud) to misstate financial information, auditing has become a legal requirement for many entities who have the power to exploit financial information for personal gain. Traditionally, audits were mainly associated with gaining information about financial systems and the financial records of a company or a business.
Brief Introduction to Audit
An audit, in general, consists of evaluation of a subject matter with a view to express an opinion on whether the subject matter is fairly presented. There are different types of audits that can be performed depending on the subject matter under consideration, for example,
Audit of financial statements;
Audit of internal control over financial reporting;
Compliance audit.
Every company registered in Hong Kong must have its financial accounts audited by auditors registered under the Professional Accountants Ordinance (PAO) annually. For newly incorporated private companies, the first set of audited accounts should be laid before shareholders at the AGM within 9 months (6 months for other companies) after its financial year-end. Subsequent AGMs should be held not more than 15 months apart. There is no mandatory year-end date for Hong Kong companies, but 31 March and 31 December are the more common ones.
The Inland Revenue Department also requires a limited company to submit a set of audited accounts (and profits tax computation) together with the company’s Profits Tax Return (Form BIR 51) , or submit a set of audited accounts within a certain time frame.
Documents required for Hong Kong Company Audit
Financial statements and trial table; trial balance, balance sheet and income statement;
Ledger including general ledger, detail ledger, bank journal and cash journal; stock ledger;
Ledger including general ledger and subsidiary ledger (bank journal and cash journal, stock ledger, detail accounts).
Procedures for Hong Kong Company Audit
1. Signing the agreement of tax accounting after evaluation, quotation and negotiation;
2. Pay all the payments in advance;
3. Filing bills to start accounting;
4. When the account is paid, it will be audited by the auditor;
5. Upon completion of the audit, the accountant will go to the government for tax filing with the audit report;
6. Submitting related files to clients.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in Unit702-703, 7/F, Fourseas Bldg, 208-212, Nathan Rd, Jordan, Hong Kong.
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