All Hong Kong incorporated companies are statutorily required by the Companies Ordinance to have their financial statements audited annually in accordance with the Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants (HKICPA).
Financial statements for corporate entities need to comply with the disclosure requirements as set out in the Companies Ordinance, the Hong Kong Financial
Reporting Standards (HKFRS) / Hong Kong
Financial Reporting Standard for Private Entities (HKFRS-PE), Small and Mediumsized Entity Financial Reporting Standard (SME-FRS) issued by the HKICPA, and and the Rules of The Stock Exchange of Hong Kong Limited in the case of listed companies.
The HKFRS and HKFRS-PE are, in all material respects, converged with International Financial Reporting Standards and International Financial Reporting Standards for small and medium-sized entities respectively, whereas SME-FRS is a ‘local’ accounting standard applicable to entities which are entitled to take advantage of the reporting exemption as set out in the Companies Ordinance.
The financial statements of private companies are not published or required to be filed on public record in Hong Kong.
Under the Hong Kong Companies Ordinance, every company shall keep proper accounting records regarding:
expended by the company and the matters in respect of which the receipt and expenditure takes place;
The accounting records are to be kept for seven years from the end of the financial year in which the last entry was made, or to which the last recorded matter relates.
Business entities are also required under the Hong Kong Inland Revenue Ordinance to maintain sufficient records of their income and expenditure to enable the assessable profits (if any) to be readily ascertained. Even if the business operations are conducted offshore, the relevant supporting invoices and receipts, together with other relevant records, are still required to be kept.