Statutory

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.

Learn to lawfully live with Tax Payment

A country or city has to provide an environment and infrastructures to support business for which taxes, duties, dues are levied on income sources. As the world develops and knowledge advances, more sophisticated tax systems are put in place by the taxation authority to raise revenue to pay for the facilities government will provide. A Certified Public Accountant acting as clients’ tax representative will prepare tax computation and returns required by the tax department. The correct preparation of tax returns will require thorough understanding of tax regulations and practices. As tax officers are not ordinarily involved in business, they will not have the same understanding on business transactions as the tax payer himself. It therefore happens often that a tax submission will call for lengthy enquires obliging the tax payer to answer.

A Certified Public Accountant will stand by the client throughout the process and contribute immensely to clear the doubtful minds on the opposite side of the fence so that tax computation are accepted by tax department and the citizen’s duty discharged by subsequent payment of a correct amount of tax.

Avoid Excessive Tax and Minimize Tax Liabilities Legally
Pay Tax – But Not More, Not Less

Many clients approach their auditors who are expected to be proficient with tax matters and most importantly, they can help clients to avoid excessive tax and minimize tax liability legally. To this end, a Certified Public Accountant with a strong background of experience, good knowledge of commercial, corporate and tax laws will help much in tax planning. He also is in a position to offer advice to companies and individuals to minimize their tax liabilities legally, and in some cases also globally.

A Variety of Tax Services

Apart from the abovementioned services, K K Yeung Partnership, Certified Public Accountants will profess himself to deal with the followings:

1) Estate duty and stamp duty planning;

2) assistance in handling IRD enquiries, tax field audits, tax investigation and appeals;

3) preparation and filing of Employer’s Returns on employees remuneration and Tax Returns for individuals;

4) preparation and filing of Property Tax Returns;

5) preparation of Personal Assessment Returns.

How to Compute Taxable Profits

Taxation is a significant charge to profits and losses accounts. Taxation representatives who are auditors themselves will assist clients to compute their profits or losses, according to the tax regulations of a country where income from businesses will arise. The ascertainment of assessable profits does not necessarily based entirely on prevalent accounting practices. The assessable profits so computed with reference to tax regulations will be the basis to arrive at an amount of tax payable to government.

In this process, the tax representatives conversant with tax regulations will be able to advise the client how his audited profits be adjusted according to tax regulations for submission every fiscal year. In normal circumstance, some queries will be asked by government tax officers soon after the submission. This will be aptly handled by a tax representative who write to help the officer to understand the basis of the computed assessable profits to enable them to reach agreement.

This process should be handled with good knowledge of tax regulations and experience. In case of the tax officer disputing the computed assessable profits, the tax representatives will lodge adequate arguments and justifications to assist the tax officer to come to agreement and settle the client’s case.

With the experience drawn from a wide variety of tax investigation cases, a tax representative entrusted with the above process will be able to pursue an amicable and affordable solution.

Why you need the Service of a Qualified Corporate Secretary

You may find in the auditor who handles your audit and taxation or his colleague the expertise to deal with (a) the setting up of companies in Hong Kong and (b) attending to all the requirements of the company laws and regulations in Hong Kong Companies Ordinance, Securities and Listing Rules, Business Registration Ordinance etc.

The above work is normally asked from a qualified Corporate Secretary who will support and advise businessmen on the following:

1) Assistance in setting up new companies;

2) maintenance of statutory records;

3) arranging and attending meetings of directors and shareholders and preparation of minutes;

4) filing of statutory documents; e.g. Annual Returns etc;

5) arrangement of nominee services;

6) provision of registered office;

7) preparation of Business Registration applications;

8) advice on liquidation and insolvency matters.

How to deal with Corporate Matters on China Investment

A Corporate Secretary with extensive China experience will be able to perform most of the assignments similar to the aforementioned services in compliance with China’s laws on Chinese joint venture enterprises involving with foreign investment, China’s laws on wholly owned foreign enterprises and other relevant economic laws.

(Note: Actual China cases can be quoted to client to help understanding of the forementioned work assignments undertaken in China)

Speak to Experts before Setting Up your Business in Hong Kong,China or elsewhere

A qualified and experienced Corporate Secretary may advise their clients on the risks involved if a company is set up (a) without a well-designated cause or (b) without foresight on its shareholding structure. The client will know that a company set up with limited liability is a perpetual entity only to vanish if dissolved or wound up. The client will have a live-time commitment to ensure the company he invested in is a vehicle which can help him to be on course with his original purpose.

A qualified Corporate expert will advise client whether he needs to set up a limited company, an unincorporated business, or a branch extended from his presently owned company. In the China context, setting up a company involved with foreign capital will require (a) extensive planning (like deciding on the business scope designated for the Company over its life time and on the usually carefully considered articles of association) and (b) the intensive justification in the form of feasibility study which required submission for approval before a business license is granted.

A “Must” to Start

A strategic and cautious consultation with adequate briefing by a qualified Corporate Secretary is a must before a businessman will contemplate to set up a company in China. Hong Kong would require comparatively less procedures although good corporate planning will still have merits. Ask for an appointment now, whether to start, to review or to remedy any corporate structure.

CALL US for accountancy service when you are confronted by …

-  Not being able to maintain good accounting records

-  Inaccurate accounting information say on accounts receivable and affect collection of sales receipts

-  No suitable financial data available for being analysed for costing and pricing strategies

-  Lack of timely financial analysis affecting your business decisions

What is accountancy service?

Companies may have their own staff performing daily basic accounting and bookkeeping functions. However, some may still lack the professional skills in maintaining proper accounting records and more importantly, performing financial analysis. Consultants can fill in such gap and provide senior management with value-added and sound comments and strategies based on financial analysis.

Our Accountancy Service …

-  Review on accounting system in use and give recommendation on hardware and software

-  Provide training to client’s accounting staff for proper accounting records’ keeping

-  Assist in preparing timely financial management reports

-  Perform financial analysis and evaluate companies’ performance

-  Report to senior management and recommend strategies on business performance and improvement measures