Yes. Under the Companies Ordinance, every Hong Kong company must have its financial statements audited each year, including companies that qualify for the reporting exemption. The only exception is a dormant company (section 447).
The reporting exemption
The reporting exemption lets qualifying private companies prepare simplified financial statements and directors' reports. A small private company qualifies if it meets two of these three conditions in a financial year:
- Total revenue not more than HK$100 million.
- Total assets not more than HK$100 million.
- Not more than 100 employees.
A private company that isn't part of a corporate group can also qualify with the unanimous written agreement of its members. Either way, the financial statements must still be audited.
Filing
A private company with a share capital does not deliver its financial statements to the Companies Registry with its annual return. That requirement applies to public companies and companies limited by guarantee.
How to prepare
- Keep complete accounting records all year. That makes the audit faster and cheaper.
- Agree your financial year-end, and plan the audit around your profits tax return deadline.
- Appoint an auditor in good time.
Related service: Audit Arrangement (From HK$6,000). We can handle this for you, and the first consultation is free.
Frequently asked questions
Does a small company still need an audit?
Yes. The reporting exemption allows simplified reports, but audit is required for all companies except dormant companies.
Which companies don't need an audit?
Dormant companies (section 447 of the Companies Ordinance).
Do I file audited accounts with the annual return?
Not for a private company with a share capital. Public companies and companies limited by guarantee do.
Sources (official)
This guide is general information, not professional advice. Government fees and deadlines can change, so check the official sources linked above.