Why does a limited company need audit services?
All newly established companies in Hong Kong will receive the first profits tax return issued by the Inland Revenue Department (IRD) 18 months after the date of incorporation of the company, and the company must complete and return it to the tax office. The 18-month period is a period of time provided by the tax bureau for newly established companies to prepare their first tax return. For the second profits tax return received, the company needs to submit it within one month after it is issued.
audit work
Auditing focuses on reviewing and analyzing the company's financial transactions, verifying every detail, and finally issuing an auditing report to ensure authenticity and fairness. For ordinary companies, audit work is not required every day, and different types of companies will have different audit content and frequency, which will be adjusted according to the situation!
1. Financial statement audit
Like a company's annual event, a big review of the financial statements is needed. The Companies Ordinance stipulates that all limited companies registered in Hong Kong (except companies with no business) must conduct annual audits. If the audited financial statements have obtained "quality certification", no matter how small your company is, you still have to make an audit report.
2. Internal Audit
The main purpose of internal audit is to help company management understand the effectiveness and efficiency of the company's internal control system, ensure that the company's financial activities are properly monitored and managed, thereby reducing the risks faced by the company, and also promote the upgrading and transformation of the company's internal operations and management. Improve efficiency.
3. Special project audit
Sometimes, a company may make an audit report based on its own needs, such as an initial public offering (IPO) or a start-up X round of financing. At this time, it needs to carefully plan a review of financial and profit forecasts to see if it meets expectations. . At this time, the importance of external audit to the enterprise is that it can enhance investors' confidence in the enterprise, improve the transparency and credibility of the enterprise, thereby promoting investor trust and investment.
Audit requirements
Unlike the accounting departments of large companies, start-ups or small and medium-sized enterprises need to consider the allocation of resources, so they do not necessarily hire full-time accounting personnel. Therefore, many small and medium-sized enterprises will hand over professional accounting, auditing and bookkeeping services to external professionals.
Auditors have higher requirements than general accountants: in addition to passing professional qualification examinations, auditors need to quickly review financial documents and understand the operations of the other company when handling work, so they need to have good understanding skills. They are like Sherlock Holmes in the financial world. When looking for evidence and conducting analysis, they also need to pay attention to details, have in-depth understanding, and keep the opinions of the audit report objective and pertinent.
Audit service price
Preparing your tax return is not something you wait until the last minute, so don’t take it lightly! To ensure successful completion of this task, preparation must begin before you receive your tax form. Of course, it is also very important to choose a reliable accounting and auditing agency.
In Hong Kong, the law clearly stipulates that auditors must be external and independent organizations. They need to be a certified public accountant (CPA) to be qualified for this role. Also, make sure that the audit fee covers the required work. Therefore, when communicating with the auditor, make sure you clearly understand the scope of fees to avoid unnecessary disputes.
In short, make preparations in advance, choose the right auditor, ensure fee transparency, and everything will go smoothly! Chinglink helps you handle all the work related to Audit .
If you are planning to start a company and become the boss, you are welcome to consult us before registering the company to understand all relevant requirements and regulations. In addition, if you have any questions about accounting, auditing and taxation, you are welcome to contact Chinglink to learn how to optimize your tax plan.
