According to the provisions set out in the Hong Kong Companies Ordinance, companies that are incorporated in Hong Kong must maintain proper books of accounts and must also satisfy statutory audit requirements on an annual basis. LIK TIN Century Group and its Certified Public Accountants in Hong Kong assist companies with the compilation and submission of all financial statements, returns and forms that a Hong Kong registered company is required to submit.
Accounting Standards & Compliance in Hong Kong
Accurate and timely bookkeeping is the first step in ensuring that companies comply with the Hong Kong statutory obligations. As a result, the company will be maintained in good standing with the authorities and the company’s officers will not incur penalties for late filing of relevant returns and documents.
According to the provisions set out in the Hong Kong Companies Ordinance, companies that are incorporated in Hong Kong must maintain proper books of accounts and must also satisfy statutory audit requirements on an annual basis. This annual financial statement must be audited by a third-party certified public accountant.
Companies incorporated in Hong Kong are required to keep proper accounting records, which should reflect the true and fair position of the companies’ affairs, its financial performance and cash flow in compliance with Hong Kong Financial Reporting Standard. These accounts should give sufficient and reliable clarification of the company’s activities.
The accounting procedures should at least be carried out on an annual basis, whilst the first set of accounts may cover a period of not more than 18 months from the incorporation date of the company. Companies can adopt any date as their financial year-end and may prepare their financial statements in any currency. At the Annual General Meeting, the statement is presented to the company shareholders and submitted to the Inland Revenue Department or it may be retained for later submission.
Financial & Management Reporting
Financial and Management reporting is crucial for making business related decisions, as well as for assisting the owners of the companies to make informed decisions regarding their investment. LIK TIN Century Group and its Certified Public Accountants in Hong Kong provide support in maintaining the accounting records and compiling detailed financial and management reporting to assist businesses in their decision making. The frequency of reporting (ranging from annual to monthly, and even more frequently) can be tailored to the specific requirements of the company.
Management reporting consists of the issuance of various reports including but not limited to:
- Balance Sheet/Statement of Financial Position at any particular date showing the financial position of the company in terms of its assets, liabilities and equity
- Profit and Loss Account/Income Statement showing the revenues generated and expenses incurred over a particular year/period
- Trial Balance at any particular date
- History of transactions for all accounts showing the history & movement of the respective accounts throughout the year
- Aged payable and aged receivable analysis and transaction history of these receivables and payables
- Inventory Listings to assist clients in their stock taking procedures
The issuance of the above reports including those of previous periods enable the client to compare between one year/period and another. We also assist clients in working out important ratios including working capital ratio, gross profit margin ratio and other ratios to create more value added to our clients.
Audit of Financial Statements
All limited liability companies registered or incorporated in Hong Kong are required to prepare a set of audited financial statements and tax computations on an annual basis and file them together with profits tax return at the Inland Revenue Department. Under the Professional Accountants Ordinance (Chapter 50), the audit of financial statements must be carried out by a Hong Kong practising Certified Public Accounts (CPA) and need to be performed in accordance with Auditing and Assurance Standards in Hong Kong.
For each accounting period, the company’s directors shall prepare financial statements comprising the balance sheet as at the last day of the accounting period to which they refer, the profit and loss account for that period, the notes to the accounts and any other statements which may be required.
The Corporate Service team at LIK TIN Century Group and its Certified Public Accountants in Hong Kong assist companies with the compilation and submission of all financial statements, returns and forms that a Hong Kong registered company is required to submit as well as with coordinating companies’ statutory audits as required by the Hong Kong Companies Ordinance and the drafting of audited financial statements for submission to the Inland Revenue Department.