K K Yeung Partnership

Auditing, a Professional Skill Helping Business

Auditing is a skill acquired by a Certified Public Accountant and his staff to check accounting and financial information maintained by a company so that they are in a position to express an opinion on the Company’s financial state of affairs. Checking is usually done against prescribed standards and accepted practices.

The prime purpose of an audit is to enable independent opinion to be expressed on the accounts a company so that the readers can relied on the information as credible to serve their different purposes.

Using Audit to Meet Regulatory Requirements

Board of Directors of companies incorporated under Hong Kong Companies Ordinances are required to have accounts caused to be prepared and to be audited periodically by Certified Public Accountants in Hong Kong. In general, owners of unincorporated businesses, partnerships, autonomous or voluntary institutions, whether they are big or small will also cause accounts to be audited as they all know the risks and the difficulties they could be involved in if their accounts are not audited.

Audit Help to Save Problems

The prime difficulty, as an example, is the unforeseeable risks associated with the inability to present audited accounts of the current or prior years to enable a creditable source of information is available to address queries from the tax authority.

Another difficulty is the risk of attracting unnecessary suspicion on the handling of monies or resources of an entity if accounts thereof are not independently audited.

Get Audit Done for Multiuse Purposes

Irrespective of the abovementioned risks, a Certified Public Accountant engaged to perform audit on the accounts of an entity will be able to report whether the accounts will show a true and fair view of the entity’s state of financial affairs at certain point in time. The same set of audited accounts will serve a number of different purposes as listed hereunder:

  1. Serving tax requirements;
  2. answering to banks’ request for accounts;
  3. serving special purposes of banks, insurance and securities companies;
  4. meeting special needs such as stock exchange listing, purchase and sale of companies’ shares, estate duty calculation, investigation for frauds, litigation.

How You Are Served Even More

Having performed an audit assignment, the auditor involved could have a good understanding of your management and operational systems. The auditor is therefore able to identify areas of potential weakness of which monies, resources, liabilities and financial risks are involved. These weaknesses, if any, will be exposed in the auditor’s management letter addressed to Company Board following the completion of audit work. This information will be a strong help to management to cause improvements which at the end will benefit all concerned.

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