Hong Kong Statutory Audit
Hong Kong is a Special Administrative Region of the People’s Republic of China; due to this firms must follow their independent regulations. On the 3rd March 2014, when it came into effect, it rewrote the 1933 ordinance that was active for more than 80 years. The new ordinance modernised Hong Kong’s company law and enhances International Businesses of Hong Kong. Following this adoption of the new Companies Ordinance, it has been made mandatory for all companies in the region to file a Hong Kong Statutory Audit, which is conducted according to Hong Kong Financial Reporting Standards (HKFRS) or SME-FRE in the case of Small-Medium Sized Enterprises (SMEs).
Concerning Accounts and Hong Kong Statutory Audit, the new CO introduced some Reporting Exemptions, relaxing the criteria to prepare financial reports and directors’ reports. These exemptions affect small private firms with a total revenue not exceeding $100 million, total assets not exceeding $100 million and with no more than 100 employees.
Public listed companies and larger Multinationals (“MNCs”) are required to prepare a more comprehensive “Directors’ Report” which also includes a forward-looking “business review”. This review provides, for instance, information regarding a company’s environmental policies and an account of the company’s relationship with employees.
Another change included in the new CO is that companies, which are not classified for simplified reporting, are given the choice of publishing just a summary financial report instead of the full list of documents.
If a company is incorporated in Hong Kong, its financial statements need to be audited by a registered Hong Kong Certified Public Accountant. The Hong Kong Institute of Certified Public Accountants is the only licensed entity able to register and certify public accountants in Hong Kong. The institute consists of more than 35,000 members, which are given the “certified public accountants” (“CPA”) title.
The registration of a firm as a CPA is managed by sections 28A to 28C of the Professional Accountants Ordinance and Professional Accountants by-laws 28 and 29.LehmanBrown is proud to have fulfilled all the requirements in order to be included in the list of Hong Kong certified public accountants firms.
LehmanBrown’s team of professionals in Hong Kong are open to you, and along with offering certified and highly skilled guidance, we can also offer a broad understanding of Mainland/Hong Kong mutual interaction thanks to our nation-wide practice.
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