Question 1

Why does my Hong Kong company need an audit?

Accepted Answer

Under the Hong Kong Companies Ordinance, all companies incorporated in Hong Kong are required to have their financial statements audited annually by a certified public accountant (CPA). This statutory requirement applies regardless of the company's size or whether it's actively conducting business. The audit ensures transparency, accuracy in financial reporting, and compliance with Hong Kong's regulatory framework.

Question 2

How long does the audit process take?

Accepted Answer

The duration of an audit depends on several factors including the size and complexity of your company, the quality of your accounting records, and the responsiveness in providing requested information. Typically, for a small to medium-sized company with well-maintained records, the audit process takes 3-4 weeks from start to finish. For larger or more complex organizations, it may take 6-8 weeks or longer.

Question 3

What documents do I need to provide for an audit?

Accepted Answer

For a standard audit, you'll typically need to provide: Complete accounting records (general ledger, journals, etc.), Bank statements and reconciliations, Sales and purchase invoices, Inventory records and valuation, Fixed asset register, Loan agreements and lease contracts, Minutes of board meetings, Significant contracts and agreements, Previous year's financial statements and audit report, Tax returns and correspondence with tax authorities. We'll provide a comprehensive checklist tailored to your specific business during our initial planning meeting.

Question 4

How much does an audit cost in Hong Kong?

Accepted Answer

Audit fees in Hong Kong depend on your company's annual turnover, transaction volume, the quality of your accounting records, and the complexity of your business (e.g. number of bank accounts, inventory, related-party transactions). Rather than a single figure, fees are best understood as a bracketed schedule. For PAT CPA's current bracket-by-bracket fee schedule, see our Hong Kong audit pricing page.

Question 5

Can you help with both audit and tax filing?

Accepted Answer

Yes, we offer comprehensive services that include both statutory audit and tax filing. This integrated approach ensures consistency between your audited financial statements and tax returns, potentially identifying tax planning opportunities during the audit process. Our team includes both audit and tax specialists who work together to provide a seamless service experience.

Question 6

What is the difference between an audit and a review?

Accepted Answer

An audit provides a high level of assurance on financial statements through detailed testing, verification procedures, and obtaining external confirmations. It results in an opinion on whether the financial statements present a true and fair view. A review provides limited assurance and involves primarily analytical procedures and inquiries. It results in a conclusion on whether anything has come to the accountant's attention that causes them to believe the financial statements are not prepared in accordance with the applicable financial reporting framework. In Hong Kong, most companies are required to have an audit rather than a review.

Question 7

How can I prepare for an audit to make the process smoother?

Accepted Answer

To prepare for an efficient audit: Ensure your accounting records are complete and up-to-date, Reconcile all bank accounts and prepare bank reconciliation statements, Prepare schedules for accounts receivable and payable aging, Document inventory counts and valuations, Organize supporting documents for major transactions, Prepare fixed asset register with additions and disposals, Compile all significant contracts and agreements, Address issues raised in previous audits. We provide a pre-audit checklist to help you prepare effectively.

Question 8

What happens if issues are found during the audit?

Accepted Answer

If issues are identified during the audit, we'll discuss them with management promptly. For accounting errors or adjustments, we'll propose correcting entries. For more significant issues like internal control weaknesses or compliance concerns, we'll provide detailed recommendations in our management letter. Our approach is constructive rather than critical – we aim to help improve your financial reporting and business processes rather than simply pointing out problems.

Question 9

My Hong Kong company has only HK$500,000 in revenue. Do I still need an audit?

Accepted Answer

Yes. Under the Hong Kong Companies Ordinance (Cap. 622), all Hong Kong limited companies must undergo annual statutory audit and submit an audit report regardless of revenue — even dormant companies require a non-operating audit. Only sole proprietorships and partnerships (unlimited companies) are exempt from statutory audit requirements. For the current dormant-audit fee, see our audit pricing page.

Question 10

When should I start preparing for the audit? How long after year-end must it be completed?

Accepted Answer

We recommend contacting your accountant within 1 month after fiscal year-end to begin audit preparation, allowing 3-4 weeks to complete the audit report. Companies with 31 March year-end should complete audit by September-early November (for 15 November tax filing deadline); 31 December year-end companies should complete audit by June-early August (for 15 August deadline). Late filing penalties can reach HK$50,000. Contact our tax service to schedule your audit timeline.

Fiscal Year-End Range	IRD Code	Paper Filing Deadline	E-Filing (+1 month bonus)
1 April – 30 November	"N" code	No auto-extension (within 1 month of return issue date)	Voluntary e-filing earns +1 month
1 December – 31 December	"D" code	15 August 2026	15 September 2026
1 January – 31 March	"M" code	15 November 2026	15 December 2026
1 January – 31 March (loss cases)	"M" code (loss)	1 February 2027	Same

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