Audit Reports and Audit Opinions Explained
更新於 2020/08/09閱讀時間約 15 分鐘
As mentioned in our previous blog, 4 Tips for Hong Kong Tax Filing and Statutory Audit, the audit and tax filing season can be a complicated process for companies of all sizes. In this article, we look to provide further guidance on this topic, specifically for new businesses who are keen to understand what the audit process entails and what they can expect from their auditor.
1. What is an Audit?
Audits are examinations of a company’s financial reports, conducted by an independent party to comply with the disclosure requirements set out in the Hong Kong Companies Ordinance (“Companies Ordinance”) and the tax obligations outlined in the Inland Revenue Ordinance (“IRO”).
Pursuant to the Companies Ordinance, all Hong Kong incorporated companies are statutorily required to audit their financial reports on a yearly basis. However, only Hong Kong Certified Public Accountant firms (“CPA”) are qualified to be appointed as an auditor for a company to complete an audit report.
It is the auditor’s responsibility to examine a company’s financial statements to determine whether the company has been in compliance with the taxation laws and accounting and auditing standards issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).
The purpose of an audit is as follows:
- To enhance the degree of confidence of intended users towards the financial statements (achieved by the expression of an opinion by the auditor). However, the company is ultimately responsible for the preparation of the company’s financial statements and supporting documents to be reviewed
- Ensure that the information and documents ultimately submitted to the IRD are accurate, with no internal bias.
2. What is an Audit Report and What is Included?
Upon completion of an audit, the auditor will prepare an Audit Report which is to be signed by the company’s directors and the company auditor. Audit Reports are important because they form the basis of calculating the tax liabilities of the company and will provide legitimacy towards the company’s business activities. It includes a written letter from the auditor containing their opinion of whether the company’s financial statements comply with the Hong Kong accounting standards. The auditor will also provide a set of audited financial statements, disclosures and profits tax computations in the Audit Report to be submitted to the IRD for tax filing purposes.
The IRD will refer to these documents to determine the company’s tax obligations for that financial year of assessment. It is not uncommon that the IRD will raise questions about the audited financial statements and tax computation, however, a well-completed Audit Report with an unqualified audit opinion will have less chances being questioned.
During the audit process, it is necessary to work with the auditor closely to provide them with the accounting records and supporting documents in order to complete the audit report. Finally, the IRD will only accept the original hard copy of the signed audit report from the company directors.
3. What is an Audit Opinion?
Audit Opinions are statements made by an auditor in the Audit Report. They are references to whether the information presented in a company’s financial reports are reflecting a complete, fair and accurate view of the company.
There are different types of Audit Opinions that can be provided:
- Unqualified Opinion – the auditor concludes that the company’s financial statements are fairly and appropriately presented and are in compliance with Hong Kong’s accounting standards
- Disclaimer of Opinion – the auditor concludes that there is insufficient audit evidence on which to base an opinion
- Adverse Opinion – the auditor concludes that the financial statements provided by the company was limited in scope or there was a material issue in regards to their preparation
The Audit Opinion provided by an auditor is largely determined by the review of the audit assessment. In the event that the auditor deems the circumstances of an audit to be unsatisfactory, they may be inclined to present an opinion other than unqualified opinion.
Common examples are when an auditor finds a company’s accounting records to be inadequate or missing and the auditor is unable to carry out an audit procedure to draw a proper audit conclusion in accordance with the accounting standards and auditing guidelines. In these circumstances, the auditor would attempt to carry out reasonable alternative procedures to obtain sufficient appropriate audit evidence to support an unqualified opinion where appropriate.
To the extent that an adverse opinion was presented, the auditor must disclose their findings in their Audit Report and highlight the deficiencies during the audit review. IRD and other stakeholders may interpret an adverse opinion as an indication that the audited company may have encountered serious reporting issues or had failed to adhere to their company obligations.
4. What Are the Hong Kong Accounting Standards?
Hong Kong companies are governed by the Hong Kong Financial Reporting Standards (“HKFRS”). These standards serve as the fundamental guiding principles for how a Hong Kong company recognises, measures, presents and discloses their accounting policy and financial results. The HKFRS has been designed to apply to general purpose financial statements.
Hong Kong companies must emphasize adherence to the HKFRS during the preparation of their financial statements. If the financial statements fail to adherence to the HKFRS, it may cause a delay in completing the audit and the company may potentially incur additional audit fees or may receive an Adverse or Unqualified Opinion.
5. Conclusion
All in all, it is important to understand the Accounting Standards and what is an audit report. As a licensed Hong Kong CPA firm, FastLane CPA’s team of qualified professionals can assist you to assure compliance with applicable reporting standards and identification of internal control issues. We focus to provide you with quality and cost effective Hong Kong audit and tax engagement services. Please contact the FastLane Group for a price quotation! Click here for further understanding about audit requirements!
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*合作聲明與警語：
本文係由國泰世華銀行邀稿。
證券服務係由國泰世華銀行辦理共同行銷證券經紀開戶業務，定期定額(股)服務由國泰綜合證券提供。
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1. 矩陣式極光科技；
2. 高階矩陣式燈光科技；
3. 智慧雷射遠光燈；
4. 數位矩陣式燈光科技；
5. 數位燈光科技。
來自美國的效果器品牌Walrus Audio今年動作相當頻繁，繼五月推出Lore反向空間系和六月推出Badwater bass前級之後，如今又推出了新的Compressor效果器：Mira。
Mira雖然體積不大，但功能倒是齊全。
繼上個月發表Badwater Bass Preamp之後，Walrus Audio緊接著又發表了另外一款全新的倒帶空間系：Lore Reverse Soundscape。
在網路上不乏錄音介面連接筆電錄音的教學，如果你跟著教學影片做好設定以後，跟我遇到一樣的問題- 發現還是沒聲音？或只有單耳有聲音？
那麼檢查這些步驟，
首先說明我的配備:
問題2: 使用garageband錄音只有單耳有聲音。
不過還是單聲道喔！
問題3:明明有錄音 為什麼看起來是靜止的心電圖？
近年異軍突起的效果器品牌和新生代funk吉他英雄Cory Wong合作推出全新簽名破音效果器The Optimist。
地球只有一個，但The Optimist的破音卻有兩個，還另外付一組3段EQ，挺方便的對吧？
Walrus Audio的Mako系列如今又多了一名新的成員：M1 High-Fidelity Modulation Machine。
512 Audio推出出了兩款全新的USB麥克風和錄音介面，比起高端的專業錄音領域，更明顯是要主打一般用戶對於直播、podcast或是簡單錄音等需求。
Into the music
Music don’t stop
Time, space and music...
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如果當年有看過《單位展》而深受感動，那麼更應該不容錯過，同樣由東京 21_21 DESIGN SIGHT 美術館企劃的「 AUDIO ARCHITECTURE：聲音的建築展」。
所謂的「建築」在展演中指得是空間與音樂的各種組合，看似每位藝術家都有獨立的影像作品，卻又像是集體在這個場地共演著一部交響曲
我不支持使用「視頻」、「音頻」這一組詞，但「視頻」和「音頻」如何在中國變為 video / audio clips 的指稱，還是個有趣的問題，本文小小的考察推敲了一下，並對相關翻譯提出一點建議。
*合作聲明與警語：
本文係由國泰世華銀行邀稿。
證券服務係由國泰世華銀行辦理共同行銷證券經紀開戶業務，定期定額(股)服務由國泰綜合證券提供。
剛出社會的時候，很常在各種 Podcast 或 YouTube 甚至是在朋友間聊天，都會聽到各種市場動態、理財話題，像是：聯準會降息或是近期哪些科
Audi不斷創造燈光科技新里程碑，LED頭燈在安全性和舒適性方面具有顯著優勢，讓燈光不僅是照明，更能彰顯每款車型其獨特個性化的視覺外觀。AUDI被車友戲稱：買車燈送汽車：
1. 矩陣式極光科技；
2. 高階矩陣式燈光科技；
3. 智慧雷射遠光燈；
4. 數位矩陣式燈光科技；
5. 數位燈光科技。
來自美國的效果器品牌Walrus Audio今年動作相當頻繁，繼五月推出Lore反向空間系和六月推出Badwater bass前級之後，如今又推出了新的Compressor效果器：Mira。
Mira雖然體積不大，但功能倒是齊全。
繼上個月發表Badwater Bass Preamp之後，Walrus Audio緊接著又發表了另外一款全新的倒帶空間系：Lore Reverse Soundscape。
在網路上不乏錄音介面連接筆電錄音的教學，如果你跟著教學影片做好設定以後，跟我遇到一樣的問題- 發現還是沒聲音？或只有單耳有聲音？
那麼檢查這些步驟，
首先說明我的配備:
問題2: 使用garageband錄音只有單耳有聲音。
不過還是單聲道喔！
問題3:明明有錄音 為什麼看起來是靜止的心電圖？
近年異軍突起的效果器品牌和新生代funk吉他英雄Cory Wong合作推出全新簽名破音效果器The Optimist。
地球只有一個，但The Optimist的破音卻有兩個，還另外付一組3段EQ，挺方便的對吧？
Walrus Audio的Mako系列如今又多了一名新的成員：M1 High-Fidelity Modulation Machine。
512 Audio推出出了兩款全新的USB麥克風和錄音介面，比起高端的專業錄音領域，更明顯是要主打一般用戶對於直播、podcast或是簡單錄音等需求。
Into the music
Music don’t stop
Time, space and music...
— Cornelius 小山田圭吾 「AUDIO ARCHITECTURE」
如果當年有看過《單位展》而深受感動，那麼更應該不容錯過，同樣由東京 21_21 DESIGN SIGHT 美術館企劃的「 AUDIO ARCHITECTURE：聲音的建築展」。
所謂的「建築」在展演中指得是空間與音樂的各種組合，看似每位藝術家都有獨立的影像作品，卻又像是集體在這個場地共演著一部交響曲
我不支持使用「視頻」、「音頻」這一組詞，但「視頻」和「音頻」如何在中國變為 video / audio clips 的指稱，還是個有趣的問題，本文小小的考察推敲了一下，並對相關翻譯提出一點建議。