Why we need to do the audit?

Statutory Requirement

According to Section 429 of Companies Ordinance (Chapter 622),
all limited liability companies registered in Hong Kong must delegate an accounting firm for audit and present their audited financial statements to each shareholder each year. The shareholders hence understand the financial status of the company.

Tax Filing Requirement

For tax assessment purpose, Inland Revenue Department also requires companies to submit
the audited financial statements together with the profits tax return (Form BIR51).

Refer to http://www.ird.gov.hk/eng/pdf/e51notes.pdf

Monitor the Performance of Directors

Shareholders are the investors of a limited company while the board of directors manages the company. Considering their own interest and profit, shareholders concern the performance of the company.

However, they do not have the rights to access all the important and sensitive financial information and details of the company under constant restriction.

Therefore, it requires an independent and professional third-party to audit the company’s financial accounts. This ensures all the financial statements reported to the shareholders are reliable, which allows shareholders to understand the performance of the director and the company.