Company Audit in Hong Kong
We explain the requirements for small business audit in Hong Kong, the company audit process, and provide accounting audits for busy founders
How does company audit in Hong Kong work?
Company audit is a process every Hong Kong company has to go through every year. It means that your financial statements have to be audited by a registered and certified public accountant outside your company. This expert then confirms that the data you submit to the Inland Revenue Department (IRD) is accurate and fair.
What are the requirements for small business audit?
Here’s the list of documents you have to provide to be audited, confirmed, and submitted to IRD:
- General business ledger
- Balance sheet
- Profit & Loss account
- Bank statements and merchant account statements
- All service invoices
- Sales, purchase and expenditure receipts
- Contracts or Agreements: Lease, Employee, etc.
- Corporate documents
How do I set up accouting audit for my company?
The company audit has to be filed together with your Profit Tax Return, the main financial report you file with the IRD. Typically, the government sends you the first tax return after 18 months from your incorporation. That’s when you need to respond with the report and the company audit.
You can and should start preparing it earlier, though. Make sure you have chosen an accounting audit agency that will deliver the job.
It is required by Hong Kong law that the auditor is outside your company so that the review he or she submits is unbiased, accurate, and trustworthy. It also has to be a Certified Public Accountant (CPA), a person with confirmed expertise in the field. They have to be practising as well.
Make sure you check that the cost of the company audit covers everything, and there won’t be any additional charges you haven’t discussed.
Hassle-free company audit
We take over the paperwork routine, answer fast and online, and give active advice. Our company audit comes at a flat fee, so no extra charges out of the blue.
Accounting plans that match
the size of your business
You don’t measure your business by the number of transactions, so neither do we. Our accounting packages are tied to your revenues. Pick a monthly plan to pay a small regular fee or a yearly one and get 2 months free of charge. All our packages come as they are, no extra charges — simple and straightforward
What’s your average monthly ?
Profits Tax Return, (BIR51) filing
HK$1,000
Consolidated unaudited report, per subsidiary
HK$5,000
Holdover of provisional profits tax application
HK$2,000
Application for Offshore tax exemption
from HK$10,000
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Q&A
What does a company audit involve?
During an audit for your company, you get your financial statements, accounting books, balance sheets, and income statements sorted. A Certified Practicing Accountant (CPA) reviews these documents. Using a 3rd party CPA is a Hong Kong audit requirement.
Then, the auditor looks at your company’s activities to verify your financial statements. The auditor then assesses the accuracy of these reports according to their expert judgement and creates an audit report.
How to audit my company?
Your company can start by preparing documents like financial statements, purchase invoices, bank statements to pass to your auditor. The auditor will conduct a review to understand your company’s activities. Your auditor may use an audit accounting software to make an accounting audit report. Your company directors will sign it and send it back to the auditor. A tax computation form is created. That, along with the completed Profits Tax Return, gets sent to the government.
Who is the company auditor?
An auditor of a company is a 3rd person accountant who reviews balance sheets, income statements, and other general ledgers of business transactions. They then assess for the accuracy of these documents. The auditor is responsible for acquiring sufficient documentation for each company they audit. The auditor must be licensed as a Hong Kong Certified Public Accountant (CPA). Your chosen CPA will audit your accounts and submit them to the Hong Kong Inland Revenue Department (IRD).
Is audit mandatory in Hong Kong?
Yes, all companies incorporated in Hong Kong, including those operating their business within Hong Kong or overseas, would need to go through an annual audit process to audit their company accounts. It is a requirement for all Hong Kong companies to do this. Hong Kong has made it mandatory for companies to file a Statutory Audit in accordance with the Hong Kong Financial Reporting Standards. They may use auditing and accounting software to assist them or, hire a 3rd party licensed Certified Public Accountant to do so.
What is an audit in accounting?
Audit in accounting happens when your company goes through verification and review of your business’s financial accounts. The audit of company accounts is done by third-party auditors in Hong Kong to make sure your company gets an accurate representation of your financial activities, with no bias. Your Hong Kong company’s financial statements, payable taxes and profit are subject to audits for the company.
