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Why do people always refer to the audit report of a Hong Kong company as an "auditor's report"? In fact, this is because of the strict provisions in section 122 of the Hong Kong Companies Ordinance.
According to this clause, except for those companies that are in a "dormant state", others:
This statement is not only crucial for the company's tax assessment, but also an important document to show the company's financial status.
Therefore, for Hong Kong companies, the annual auditor's report is not only a legal obligation, but also an important step to safeguard the company's reputation, protect the rights and interests of shareholders and creditors, and a strong guarantee for the financial transparency of Hong Kong companies, as well as a responsible document to be submitted to Hong Kong government departments (including but not limited to the Inland Revenue Bureau, Customs and Excise Department, Financial Services Bureau, etc.).
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Characteristics of Hong Kong's accounting system
Hong Kong's accounting standards are closely linked to the end of its financial year, which gives Hong Kong's accounting system unique flexibility. The financial year in Hong Kong usually begins on April 1 of each year and lasts until March 31 of the following year.
For companies, there is no uniform rule for their accounting year, and it is entirely up to each company to decide on its own according to its own circumstances and business needs.
As a result, in Hong Kong, the accounting year-end dates of companies are diverse.
It is worth mentioning that according to the company laws of Hong Kong, an accounting firm is an unlimited company. This means that accounting firms are jointly and severally liable for financial reports to their clients.
This accountability system ensures that the firm always maintains a high level of professionalism and responsibility in providing services to clients, thereby safeguarding the accuracy and reliability of accounting information in Hong Kong.
This institutional design not only helps to maintain the stability of Hong Kong's capital market, but also provides investors with more transparent and reliable financial information.
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A common version of the Hong Kong auditor's report
The Hong Kong Institute of Certified Public Accountants (HKICPA) has launched the Financial Reporting Framework and Financial Reporting Standards for Small and Medium-sized Enterprises (SME-FRF and SME-FRS).
The development of these standards facilitates the preparation of financial statements for SMEs by simplifying requirements and removing irrelevant topics relating to eligible Hong Kong SMEs and private entities with no public liability.
The SME-FRF and SME-FRS are effective as of 2014 and apply to financial periods beginning on or after March 3, 2014. These accounting standards are administered by the Hong Kong Institute of Certified Public Accountants and comply with section 380 of the new Companies Ordinance.
Therefore, there are three commonly used versions of Hong Kong audit reports:
1.《中小企财务报告准则》Small and Medium-sized Entity Financial Reporting Standard (简称SME)
2.《私营企业香港财务报告准则》Hong Kong Financial Reporting Standard For Private Entities（简称PE）
3.《香港财务报告准则》Hong Kong Financial Reporting Standard（HKFRS，简称FULL GAAP）（全面披露）
If you need to issue a Hong Kong audit report, please feel free to contact us.