According to the Hong Kong Companies Ordinance, all Hong Kong Limited Companies are required to have their financial statements audited by a Certified Public Accountant (CPA). The audited accounts are required to be submitted together with the annual profits tax return filing to the Inland Revenue Department (IRD) as well, unless the company qualifies as a small corporation.
It is to be noted that the small business filing exemption for the IRD does not extend to the statutory requirement of the audit under the Companies Ordinance and the directors are liable for non-compliance.
The objective of an external audit is for the auditor to express an opinion on the truth and fairness of financial statements. This opinion greatly enhances the credibility of the financial statements with users, such as lenders, creditors and investors.