Audit Documentation

Person-in-charge (Owner or Director) in the Company is required to sign for the documents that involves in the whole audit assignment process.

Clients often concern the rationale and necessity in signing the documents, and the consequences of not signing.

The following documents are used to sign by clients:

Before the Start of Auditing

Documents

Explanation

Impact

Quotation of Audit Services
  • It generally states clearly the accounting standards employed and terms for performer of audit services.
  • Customers are required to sign and return the quotation before
    the expiry date

Audit Engagement Letter
  • The format and report are essentially specified by the Hong Kong Institute of Certified Public Accountants.
  • An agreement signed between the accounting firm and clients on the responsibilities of both parties in dialing and reporting the audited financial statements
  • Must be signed before conducting the audit work.
  • Specifies the respective responsibilities and scopes of works between the Director(s) of the Company and the auditor.

Letter of Appointment of Tax Representative
  • Sent to the Inland Revenue Department to appoint the company secretary of an accounting firm as tax representative.
  • Tax returns submission by the tax representative can be delayed according to the practice of IRD only after the appointment of tax representative.

Bank Confirmation
  • By confirming the specimen signature of clients, bank is authorized to directly deliver the bank balances and status of clients to the auditors on the year-end date.
  • The bank balances is regarded as an important audit evidence after verification.

Reconciliation Letter for Current Accounts
  • Issued the reconciliation letter of credit balance/ debit balance to the customers and suppliers in the name of the Company of the client.
  • The reconciliation letter must be signed by the director(s) of our client company/ Accountant-in-charge and then transmitted to the auditor for issuance after audit assignment.
  • May lead to limitation of audit scope and qualified opinions made by the auditor on the financial statements if the client refuses issuing the bank statement for individual accounts (generally the accounts payable).