Auditing and Accounting Requirements of a Hong Kong Company

Audit

Statutory reports are required annually for companies incorporated in Hong Kong. The reports must contain audited financial statements for the current year, with corresponding amounts for the preceding year, including a balance sheet, profit and loss account, and a cash flow statement. Audited financial statements must be signed off by a certified public accountant.

Record keeping

The Inland Revenue Ordinance requires you to keep sufficient records to enable your assessable profits to be readily ascertained. All records must be retained for seven years from the transaction date.

The Inland Revenue Department has issued guidelines to help small businesses in preparing and keeping their records. The guidelines explain the minimum records which must be kept in order to comply with the law.

If your business deals in goods, you are required to maintain records of all goods purchased and sold. In most cases, the relevant purchases and sales invoices issued for the transactions will satisfy the requirement.

Businesses involved in the provision of services must maintain records of all services provided in sufficient detail to enable the Inland Revenue Department to verify the entries in the business¡¦s day to day record of all monies received and expended.