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A New Business Owner’s Guide to a Company Audit in Hong Kong

A company audit assures that all the information you’ve included in your business’s financial report is true and fair. If you’re wondering which companies require an audit, the answer is all of them.

All business owners in Hong Kong must get their financial statements checked by someone outside your company (ensuring there’s no bias). It shows compliance and that you’re operating according to the local accounting standards. On top of that, it’s a legal obligation. So, for a new business owner like you, there’s no better time to get up to speed with the process.

I’m Doing My First Company Audit, Where Do I Start?

Everything along with your financial statements, taxes payable to the government as well as profits need to be verified and audited by a third-party. As a business owner, it’s your responsibility to gather all of the above, but we know how busy you can get. That’s why you can count on us for accounting services online, automated bookkeeping, and proactive tax support.

Another good place to start is to get some key acronyms out the way:

  • CPA (Practising): A Certified Public Accountant with a Practising licence (these are people who will conduct the audit of your company’s financial statements)
  • IRD: It sounds official ‘cause it is. This is the Hong Kong Inland Revenue Department; they’re the ones who deal with collecting duties and taxes.
  • PTR: Profits Tax Return form
  • CO: This refers to the Hong Kong Companies Ordinance; the body that governs companies incorporated, and overseas companies, registered in Hong Kong.

What’s a Company Auditor and how do I choose one?

Professional, qualified and experienced. Those are 3 words that summarise what you should look for in your CPA to do your company audit in Hong Kong. They’re the ones who will be responsible for reviewing your financial statements. After you’ve received your first tax return form from the IRD -  which usually happens 18 months after your company incorporation - you’ll need to prepare any necessary statements or documents. As always, it’s best to do this ahead of time. No rushing needed. so you can avoid a last-minute rush.

What documents will I need?

Now let’s look at the requirements of a company audit. Below is a quick look at the key documents that you’ll need to have prepped. You’ll notice that some are financial-specific documents while others relate more to giving a view of your business operations (i.e giving sight of the internal workings, and the way you manage your organisation)

  1. General business ledger
  2. Balance sheet
  3. Profit & Loss account
  4. Bank statements and merchant account statements
  5. Service invoices: From Consulting to Subcontracting
  6. Sales, purchase and expenditure receipts
  7. Contracts or Agreements: Lease, Employee, Contractors, etc.
  8. Corporate documents


You know those invoices, sales orders and shipping documents that tend to pile up? Keep them! In fact, keep any docs related to business transactions, from phone bills to proof of travel. These are all needed in your audit to support info related to your company’s financial activity, and they may be checked by IRD if there is tax investigation.

What exactly happens during the auditing process?

Let’s break it down:

  • You get your financial statements and related business documentation sorted.
  • A Practising CPA will perform the audit of your accounts by reviewing all of the documents you’ve sent.
  • The review goes beyond just finances as they’re also looking to get a clear view of how your company operates.
  • They will submit your audited accounts and tax computation to the Hong Kong IRD.
  • The IRD will send you the tax demand note if they agree with the Profits Tax Return filed. (they always have the right to  request additional supporting documentation, and that’s why you need to properly keep the files for 7 years even if the tax was paid.)

Auditing Your Hong Kong Business: A Summary

Doing a company audit is a legal requirement for all business owners in Hong Kong. It’s done by a certified third-party and makes sure your tax is assessed and filed correctly. Don’t procrastinate. Get on top of your auditing and business accounting from the get-go and make sure you know what documents you’re going to need to give a picture of your finances and operations.

Feel like you need to talk to an actual human being?

We get it. Drop us an email if you’d like to chat over any of the above. We’ll help you declutter any jargon to get the clarity and support you’re after so that you can complete your first company audit with confidence. If you’d like to check out an official source, you can start by visiting the Inland Revenue Department’s website.

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