Q: Why do audit fees vary so much? What factors determine pricing?

Audit fees are driven by: (1) Transaction volume (each transaction requires 3-5 min substantive testing); (2) Number of bank accounts (each requires 2-3 hours reconciliation); (3) Inventory presence (requires physical stocktake and valuation testing); (4) Related-party transactions (HKAS 24 disclosures required); (5) Cross-border operations and subsidiaries (consolidation testing). For example, a HK$5M revenue e-commerce business with 5,000 transactions costs 30-50% more to audit than a HK$5M property holding company with 50 transactions.

Q: What's included in the Non-Operating Company Audit at HK$3,000?

Non-operating audit applies to dormant companies with no business activity during the financial year, subject to: (1) No invoices issued; (2) No payments received; (3) No bank transactions (except annual service fees and interest income); (4) Statement of no operations submitted. HK$3,000 covers: audit report, profits tax return (BIR51), and directors' report. Any transactions during the year require upgrade to Small Business Audit from HK$5,000.

Q: I have inventory. How much will it add to the audit fee?

Inventory adds HK$2,000-5,000 to audit fees, requiring: (1) Year-end physical stocktake observation; (2) Inventory valuation testing (lower of cost and NRV); (3) Inventory turnover analysis; (4) Cut-off testing to prevent period-end errors. Simple inventory (trading companies) commands lower increases; complex inventory (manufacturing, multi-warehouse) costs more.

Q: How does PAT CPA's audit compare to market budget options (HK$3,000-4,000)?

Budget audit packages (HK$3,000-4,000) typically: (1) Only suit genuinely non-operating companies; (2) Performed by non-HKICPA-licensed staff; (3) Lack substantive testing or sample selection; (4) Signed by non-practising accountants. All our audits are signed by an HKICPA-licensed CPA (P06975) personally, in accordance with HKICPA auditing standards, accepted by IRD, banks, and regulators. Cheap audits flagged by IRD can lead to back-taxes and penalties.

Q: Is the first-year audit for a new company more or less expensive?

First audits are typically 20-40% more expensive than subsequent years due to: (1) Establishing opening balance audit records; (2) Assessing accounting policies; (3) Setting up internal controls understanding; (4) First-time management interactions take longer. We perform first-year audits for newly incorporated companies at the same tiered rates, reducing the compliance barrier for SMEs. New companies have an 18-month grace period — we recommend contacting us within 12 months of incorporation.

Q: If issues are found during the audit, will I be charged extra?

No. Our quotes are fixed-fee, with no upcharges for discovering issues or requiring additional testing — unless the client requests services outside the original scope (e.g., adding subsidiary audit, redoing opening balances after year-end date change). Any scope changes are notified to the client in writing and re-quoted before commencement.

Q: Are there hidden fees in the quote? Like government fees or document fees?

PAT CPA audit fees are fixed-fee for 'audit work' itself — covering audit report, supporting schedules, directors' report, and profits tax computation. No additional charges for: government document searches (we conduct Companies Registry searches on your behalf if needed), individual director signing fees, or additional original copies (first 3 originals free). Specialty services (like IRD audit support, bank-specific certified copies) are clearly itemized during consultation.

Question 1

What's the typical audit fee for a Hong Kong SME?

Accepted Answer

PAT CPA audit pricing is tiered by company revenue: Small Business from HK$5,000 (revenue < HK$1M), SME HK$6,000-22,000 (revenue HK$1-20M), Mid-Sized HK$25,000-38,000 (revenue HK$20-50M). Final quote depends on transaction volume, business complexity, and special matters. All audits performed by HKICPA-licensed CPA (P06975).

Question 2

Why do audit fees vary so much? What factors determine pricing?

Accepted Answer

Audit fees are driven by: (1) Transaction volume (each transaction requires 3-5 min substantive testing); (2) Number of bank accounts (each requires 2-3 hours reconciliation); (3) Inventory presence (requires physical stocktake and valuation testing); (4) Related-party transactions (HKAS 24 disclosures required); (5) Cross-border operations and subsidiaries (consolidation testing). For example, a HK$5M revenue e-commerce business with 5,000 transactions costs 30-50% more to audit than a HK$5M property holding company with 50 transactions.

Question 3

What's included in the Non-Operating Company Audit at HK$3,000?

Accepted Answer

Non-operating audit applies to dormant companies with no business activity during the financial year, subject to: (1) No invoices issued; (2) No payments received; (3) No bank transactions (except annual service fees and interest income); (4) Statement of no operations submitted. HK$3,000 covers: audit report, profits tax return (BIR51), and directors' report. Any transactions during the year require upgrade to Small Business Audit from HK$5,000.

Question 4

I have inventory. How much will it add to the audit fee?

Accepted Answer

Inventory adds HK$2,000-5,000 to audit fees, requiring: (1) Year-end physical stocktake observation; (2) Inventory valuation testing (lower of cost and NRV); (3) Inventory turnover analysis; (4) Cut-off testing to prevent period-end errors. Simple inventory (trading companies) commands lower increases; complex inventory (manufacturing, multi-warehouse) costs more.

Question 5

How does PAT CPA's audit compare to market budget options (HK$3,000-4,000)?

Accepted Answer

Budget audit packages (HK$3,000-4,000) typically: (1) Only suit genuinely non-operating companies; (2) Performed by non-HKICPA-licensed staff; (3) Lack substantive testing or sample selection; (4) Signed by non-practising accountants. All our audits are signed by an HKICPA-licensed CPA (P06975) personally, in accordance with HKICPA auditing standards, accepted by IRD, banks, and regulators. Cheap audits flagged by IRD can lead to back-taxes and penalties.

Question 6

Is the first-year audit for a new company more or less expensive?

Accepted Answer

First audits are typically 20-40% more expensive than subsequent years due to: (1) Establishing opening balance audit records; (2) Assessing accounting policies; (3) Setting up internal controls understanding; (4) First-time management interactions take longer. We perform first-year audits for newly incorporated companies at the same tiered rates, reducing the compliance barrier for SMEs. New companies have an 18-month grace period — we recommend contacting us within 12 months of incorporation.

Question 7

If issues are found during the audit, will I be charged extra?

Accepted Answer

No. Our quotes are fixed-fee, with no upcharges for discovering issues or requiring additional testing — unless the client requests services outside the original scope (e.g., adding subsidiary audit, redoing opening balances after year-end date change). Any scope changes are notified to the client in writing and re-quoted before commencement.

Question 8

Are there hidden fees in the quote? Like government fees or document fees?

Accepted Answer

PAT CPA audit fees are fixed-fee for 'audit work' itself — covering audit report, supporting schedules, directors' report, and profits tax computation. No additional charges for: government document searches (we conduct Companies Registry searches on your behalf if needed), individual director signing fees, or additional original copies (first 3 originals free). Specialty services (like IRD audit support, bank-specific certified copies) are clearly itemized during consultation.

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