How is the accounting and auditing system in Hong Kong organised?

How is the accounting and auditing system in Hong Kong organised?

The opinion that the company registration process in Hong Kong is the most difficult thing that a businessman has to do is fundamentally wrong. It would seem that once the firm has been established, the difficulties and numerous checks are gone and the entrepreneur is left to do only his or her direct work. However, in fact, everything is happening differently, and support for the activities of the firm takes a lot of effort and time from its owner. Let's take a closer look at accounting and auditing in Hong Kong in 2020.

General rules for financial reporting in Hong Kong in 2020

  • Reporting to regulatory authorities is submitted once in a financial year, the expiration date of which the company has the right to choose, but their observance is under strict control;
  • The first data on the financial performance of the company should be submitted to the controlling bodies no later than 18 months after its registration;
  • The audit should be performed by an accountant who has extensive experience and has successfully passed the certification procedure. In the event of an error, the specialist may be punished (including a criminal one), and the company may suffer a serious blow to its reputation;
  • The accounting and audit system in Hong Kong in 2020 has three main stages: preparation and analysis of primary documentation, reporting and audit.

Accounting in Hong Kong in 2020 is regulated by the "Companies Ordinance" and "Hong Kong Internal Revenue Ordinance", the requirements of which are fixed:

  • annual audit;
  • the obligation of companies to retain for 7 years and provide any initial financial documents at the first request of the regulatory authorities;
  • obligation to provide timely audited financial statements to the tax authorities of the country.

Regulators are asked to organize all documents by date and type, to keep records in Chinese or English, and reserve the right to request the originals for analysis instead of certified copies.

What documents will be required to prepare financial statements?

  • Corporate bank statements certified by the seal and signature of the responsible officer;
  • Documents confirming costs and losses received by the organization during the reporting period;
  • Consignment notes for international and long-distance transport;
  • Invoices (analog of waybills) containing the price of goods or services, information on the terms and participants of the transaction, and mandatory details of partner companies.

Despite the fact that businessmen operating on the territory of Hong Kong have the right to choose the beginning and end of the fiscal year, this jurisdiction has a generally accepted time frame: from April 1 to March 31. The terms of the fiscal year must be chosen by the owner of the company once for the entire period of activity and be officially announced to the regulatory authorities.

Hong Kong audit in 2020

To conduct an audit, you need to hire a qualified specialist with at least 4-5 years of experience. The activity of such specialists is closely monitored, and the report on the results of work may be requested by the tax service at any time, so the question of choosing an auditor for your company should be approached with all responsibility. IT-OFFSHORE specialists are ready to provide professional assistance online. We will help you to understand all the nuances of accounting, auditing and tax reporting in Hong Kong and will assist you in the preparation of all necessary documents in a short time.

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