Audit and Assurance
Statutory Audit Services Provided in Link Pro CPA
Many Countries require companies to file a statutory audit to governments for taxation purposes. Companies are required to file the audit with compliance to the local area’s government rules (HKFRSs for auditing in Hong Kong, IFRSs for auditing internationally). Companies located in Hong Kong need to submit their audited financial statements with their Profits Tax Return to the Inland Revenue Department.
What is Statutory Audit?
A statutory audit is a legally required review of the accuracy of a company’s or government's financial records. Its purpose is to determine whether an organization provides an accurate representation of its financial position by examining information such as bank balances, bookkeeping records, and financial transactions.
Statutory Audit in Hong Kong
For a newly incorporated company, its director(s) may appoint its first auditor at any time before the first Annual General Meeting (“AGM”) which should be held within 18 months from the date of its incorporation.
For public listed companies and larger Multinationals (“MNCs”), these companies must prepare a more comprehensive “Directors’ Report” that includes a “business review”. The business review provides information about the company’s environmental policies and an account of the company’s relationship with its employees.
The Auditor’s Eligibility, Roles, and Responsibility
- The auditor must be a Certificated Public Accountant (“CPA”) qualified under the Professional Accountants Ordinance and must hold a Practicing Certificate issued by the Hong Kong Institutes of Certified Public Accountants (“HKICPA”).
Note: The HKICPA is the sole licensed entity that is able to register and certify public accountants in Hong Kong.
- The auditors must report to the company’s shareholders on the audited financial statements audited, including consolidated financial statements (where applicable), laid before the AGM of the company.
- The auditors must report whether or not the financial statements show a true and fair view, and it is comply with the Companies Ordinance and other laws applicable to certain regulated industries.
- The auditors have to comply with certain auditing guidelines applicable to specific circumstance.
- For non-Hong Kong companies, the audits of financial statements may be conducted in accordance with international auditing standards.
- The auditors must comply with the code of ethics, particularly the independence requirements.
Information Required for Auditing
- The annual financial statements that include the income statement, balance sheet, and cash flow statement
- The accounting record in the fiscal year that includes bank statements, contracts, expense invoices and receipts, etc.
- The complete list of affiliated companies and affiliated persons.
- Other information as and when needed.
Process of Auditing
- Understand and make remarks/suggestions on the internal controlling system of the company.
- Assemble and record relevant information.
- Compliance testing.
- Substantive control.
- Draft the auditing report and forward to the company (that has been audited)
Why Choose Link-Pro CPA?
At Link-Pro, we provide assurance and audit services to companies that bring value beyond an opinion. We will help identify ways that your business’ financial performance could be improved and how to achieve your goals more effectively. Our audit approach combines a keen understanding of the competitive business landscape and our experience evaluating the risks you face on a daily basis. We aim to provide the maximum return on your investment through value-packed management letters that offer in-depth analysis of your financial statements, internal controls, and operational efficiency.
By taking the time to gain a thorough understanding of their clients’ businesses and by providing a risk-focused service integrating rigorous risk assessment with diagnostic processes and audit testing procedures tailored to the specific audit, our member firms maintain excellent relationships with their clients. This quality-led approach means members provide an intelligent, constructive and challenging audit to every one of their clients. We believe the statutory audit should be viewed as an opportunity, not an overhead.
By keeping you up-to-date with relevant financial reporting and related legislative and technical changes throughout the annual cycle, as well as providing appropriate insights into maximising the potential of your business, we believe that our members’ processes can actually serve to enhance the operation of your business. Through robust audit tools, resources and procedures, Link-Pro delivers high quality audit services, adhering to the highest standards of independence, ethics, professional objectivity while applying technical excellence.