{"id":205,"date":"2026-10-08T02:24:04","date_gmt":"2026-10-08T02:24:04","guid":{"rendered":"https:\/\/vivosgroup.com\/hk\/insights\/hong-kong-company-audit-requirements\/"},"modified":"2026-10-08T02:24:04","modified_gmt":"2026-10-08T02:24:04","slug":"hong-kong-company-audit-requirements","status":"publish","type":"post","link":"https:\/\/vivosgroup.com\/hk\/insights\/hong-kong-company-audit-requirements\/","title":{"rendered":"Hong Kong Company Audit Requirements in 2026: Who Needs an Audit and Which Rules Apply"},"content":{"rendered":"\n<div class=\"wp-block-group alignfull vv-section vv-section--grey vv-hero has-global-padding is-layout-constrained wp-container-core-group-is-layout-b7edd97f wp-block-group-is-layout-constrained\">\n<p class=\"vv-eyebrow wp-block-paragraph\">Insights \u00b7 Hong Kong Compliance<\/p>\n\n\n\n<h1 class=\"wp-block-heading\">Hong Kong Company Audit Requirements in 2026: Who Needs an Audit and Which Rules Apply<\/h1>\n\n\n\n<p class=\"vv-answer wp-block-paragraph\">Every Hong Kong company must have its annual financial statements audited by a certified public accountant (practising), whatever its size, and only a dormant company is exempt. The Companies Ordinance (Cap. 622) requires directors to prepare financial statements each year (s.379) and an auditor\u2019s report on them (s.405). Small private companies meeting two of three tests (revenue and assets up to HK$100 million, up to 100 employees) may use simpler SME-FRS reporting but still need the audit, and the audited accounts must go with the profits tax return.<\/p>\n\n\n\n<p class=\"vv-lede wp-block-paragraph\">For directors, finance leads and group controllers of Hong Kong companies: who must be audited, the reporting exemption thresholds and approvals, dormant status, which accounting standards apply, auditor rules, the link to the profits tax return, penalties, and a worked example for a 31 March year-end.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-facts has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<figure class=\"wp-block-table\"><table><tbody><tr><th>Hong Kong company audit rules<\/th><th>Position at 8 October 2026<\/th><\/tr><tr><td>Who needs an audit<\/td><td>Every Hong Kong company, of any size, except dormant companies (Cap. 622 ss.379, 405, 447)<\/td><\/tr><tr><td>Who can audit<\/td><td>A practice unit registered with the AFRC; only a CPA (practising) signs the report<\/td><\/tr><tr><td>Small private company test<\/td><td>Any 2 of 3: revenue up to HK$100m, assets up to HK$100m, up to 100 employees<\/td><\/tr><tr><td>Eligible private company test<\/td><td>Any 2 of 3 at HK$200m, HK$200m and 100 employees, with a 75% members\u2019 resolution<\/td><\/tr><tr><td>Accounting standards<\/td><td>HKFRS, HKFRS for Private Entities or, if exempt, SME-FRS<\/td><\/tr><tr><td>Profits tax return<\/td><td>BIR51 with audited accounts and tax computation, even below HK$2m gross income<\/td><\/tr><tr><td>2025\/26 return, code M (January\u2013March year-ends)<\/td><td>16 November 2026 via a tax representative; loss cases 1 February 2027 if listed by 2 November 2026<\/td><\/tr><tr><td>Record retention<\/td><td>7 years after the financial year-end; directors fined up to HK$300,000<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Does every Hong Kong company need an audit? The core rules<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Yes: every Hong Kong company needs an annual audit, whatever its size, unless it is dormant. Under the Companies Ordinance (Cap. 622), the directors must prepare financial statements for each financial year (s.379), and the auditor must report on them (s.405), stating whether they were properly prepared under the Ordinance and, outside the reporting exemption, whether they give a true and fair view (s.406). Start-ups, loss-making companies, holding companies and reporting-exempt companies are all covered; only a dormant company is relieved (s.447).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The audit also supports the tax return. A corporation with gross income files Form BIR51 with audited financial statements and a tax computation, and since the 2022\/23 returns this includes small corporations with gross income up to HK$2 million. The Inland Revenue Department (IRD) may treat a return without them as invalid. Its listed exceptions are dormant companies and corporations incorporated where no audit is required, which supply a tax representative\u2019s certificate instead. The 2026 filing dates are in our compliance calendar.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Only a practice unit can be appointed auditor (s.393): a certified public accountant (practising), a CPA firm or a corporate practice registered with the Accounting and Financial Reporting Council (AFRC), which has handled these registrations since 1 October 2022. Only a CPA (practising) may sign an audit report, and an officer or employee of the company, or their partner or employee, is disqualified.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>First auditor: appointed by the directors before the first AGM (s.395).<\/li>\n\n<li>Later years: appointed by members at the AGM for the previous year (s.396), or deemed reappointed in some companies that hold no AGM (s.403).<\/li>\n\n<li>Casual vacancy: filled by the directors, or by members if the directors have not acted within one month (s.397).<\/li>\n\n<li>Removal: ordinary resolution at a general meeting on special notice; Form NA1 to the Registrar within 15 days (s.419).<\/li>\n\n<li>Resignation: written notice with a statement of circumstances; Form NA2 within 15 days (ss.417, 424).<\/li>\n<\/ul>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Small private company reporting exemption: thresholds and approval in 2026<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A private company falls within the reporting exemption if it meets any two of three tests: revenue up to HK$100 million, total assets up to HK$100 million and no more than 100 employees (s.359 and Schedule 3), with no members\u2019 approval. A larger company can qualify as an eligible private company, up to HK$200 million of revenue and assets and 100 employees, if members holding at least 75% of the voting rights pass a resolution at a general meeting on special notice and none votes against (s.360). A member objecting in writing at least 6 months before a year-end cancels it for that year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A company meeting two tests in its first financial year qualifies from then on and drops out only after failing two tests for 2 consecutive years (s.361). A holding company is tested on group aggregates, and every group company must qualify. Banks, Part V licensed corporations, insurers and certain deposit-taking businesses are excluded (s.359(4)). A copy of any resolution, or of the unanimous written agreement that lets a private company outside a group use the exemption for one year at any size, goes to the Registrar within 15 days.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Route<\/th><th>Revenue<\/th><th>Total assets<\/th><th>Employees<\/th><th>Approval<\/th><\/tr><\/thead><tbody><tr><td>Small private company<\/td><td>Up to HK$100m<\/td><td>Up to HK$100m<\/td><td>Up to 100<\/td><td>None<\/td><\/tr><tr><td>Group of small private companies<\/td><td>Up to HK$100m (group)<\/td><td>Up to HK$100m (group)<\/td><td>Up to 100 (group)<\/td><td>None<\/td><\/tr><tr><td>Eligible private company<\/td><td>Up to HK$200m<\/td><td>Up to HK$200m<\/td><td>Up to 100<\/td><td>75% resolution, none against<\/td><\/tr><tr><td>Group of eligible private companies<\/td><td>Up to HK$200m (group)<\/td><td>Up to HK$200m (group)<\/td><td>Up to 100 (group)<\/td><td>75% resolution, none against<\/td><\/tr><tr><td>Small guarantee company<\/td><td>Up to HK$25m<\/td><td>No test<\/td><td>No test<\/td><td>None<\/td><\/tr><tr><td>Private company outside a group<\/td><td>Any<\/td><td>Any<\/td><td>Any<\/td><td>All members in writing, for one year<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Any two of the three tests must be met (revenue only for guarantee companies). Every route still needs an audit.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Full HKFRS, reporting exemption or dormant: which standards apply?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A company outside the reporting exemption prepares true and fair financial statements under HKFRS Accounting Standards, or under the HKFRS for Private Entities if it has no public accountability. A company within the exemption need not show a true and fair view (s.380(7)) and may use the HKICPA\u2019s cost-based Small and Medium-sized Entity Financial Reporting Framework and Financial Reporting Standard (SME-FRS), with no auditor\u2019s remuneration note and no business review (s.388(3)(a)).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Two HKICPA changes start on 1 January 2027. The revised HKFRS for Private Entities, issued in April 2025 and equivalent to the third edition of the IFRS for SMEs, applies to annual periods beginning on or after that date, with early adoption allowed. HKFRS 18 replaces HKAS 1 for full HKFRS reporters from the same date. No SME-FRS revision was announced in 2025\u20132026, as at October 2026.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Feature<\/th><th>Full HKFRS reporting<\/th><th>Reporting exemption<\/th><th>Dormant company<\/th><\/tr><\/thead><tbody><tr><td>Who<\/td><td>Public companies and private companies above the thresholds<\/td><td>Private companies within s.359<\/td><td>Qualified private company with no accounting transactions<\/td><\/tr><tr><td>Standards<\/td><td>HKFRS, or HKFRS for Private Entities<\/td><td>SME-FRS, or either HKFRS option<\/td><td>None<\/td><\/tr><tr><td>Financial statements<\/td><td>True and fair view (s.380)<\/td><td>No true and fair requirement (s.380(7))<\/td><td>Not required (s.447)<\/td><\/tr><tr><td>Audit opinion<\/td><td>True and fair<\/td><td>Properly prepared under Cap. 622<\/td><td>No audit<\/td><\/tr><tr><td>Directors\u2019 report<\/td><td>Full, with business review unless exempt or opted out<\/td><td>Simplified; no business review<\/td><td>No statements to report on (s.447)<\/td><\/tr><tr><td>AGM<\/td><td>Within 9 months of year-end (private companies)<\/td><td>Same<\/td><td>Not required (s.611)<\/td><\/tr><tr><td>Annual return (NAR1)<\/td><td>Yearly<\/td><td>Yearly<\/td><td>Not required (s.663)<\/td><\/tr><tr><td>With the BIR51<\/td><td>Audited accounts and tax computation<\/td><td>Audited accounts and tax computation<\/td><td>No audited accounts<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Dormant companies: the only exemption from audit<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A private company with no accounting transactions can avoid the audit only by registering as dormant: it passes a special resolution declaring dormancy and delivers it to the Registrar, and dormancy runs from delivery or a later stated date (s.5). An accounting transaction is anything section 373 requires to be recorded, except paying a fee required by an Ordinance, so interest or bank charges can count. While dormant, the company need not prepare or audit financial statements (s.447), hold AGMs (s.611) or file annual returns (s.663). Dormancy ends when it delivers a resolution to resume transactions, or when one occurs.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Excluded: authorized institutions, insurers, Part V licensed corporations and their associated entities, MPF approved trustees, their holding companies, and any company that was one in the previous 5 years.<\/li>\n\n<li>Annual return: still due for the year dormancy starts if it starts after the 42nd day following the incorporation anniversary.<\/li>\n\n<li>Still required: reporting changes of registered office, directors and company secretary.<\/li>\n\n<li>Tax: file any profits tax return the IRD issues, without audited accounts.<\/li>\n<\/ul>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Worked example: a HK$60 million trading company with a 31 March 2026 year-end<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A trading company with HK$60 million of revenue for the year to 31 March 2026 is a small private company: it may use the SME-FRS, still needs an audit and, through a tax representative, files its 2025\/26 return by 16 November 2026. Assumptions: a private company with no subsidiaries, not a bank, insurer or licensed corporation, with total assets of HK$42 million, 35 employees and the exemption in earlier years.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Step 1, tests: revenue HK$60 million against HK$100 million (met); assets HK$42 million against HK$100 million (met); 35 against 100 employees (met). Two are needed.<\/li>\n\n<li>Step 2, tier: small private company (s.359(1)(a)), so no resolution or Registrar filing.<\/li>\n\n<li>Step 3, standards: the SME-FRS is available; the audit opinion covers proper preparation under Cap. 622, not a true and fair view.<\/li>\n\n<li>Step 4, growth: if assets reach HK$130 million and staff 120 in the year to 31 March 2027, only one test is met. The company stays exempt, and is disqualified from the year to 31 March 2029 only if it fails again in the year to 31 March 2028.<\/li>\n\n<li>Step 5, fallback: revenue of HK$60 million and assets of HK$130 million are within HK$200 million, so a 75% resolution would keep it exempt as an eligible private company.<\/li>\n\n<li>Step 6, return: the year-end falls in 2025\/26, code M; issued 1 April 2026; due 16 November 2026 with a tax representative, or 1 February 2027 for a loss case listed by 2 November 2026.<\/li>\n\n<li>Step 7, AGM and records: lay the audited accounts by 31 December 2026 and keep the records until at least 31 March 2033.<\/li>\n<\/ul>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">What changed for Hong Kong audits and reporting in 2025\u20132026?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The Cap. 622 audit duty, exemption thresholds and dormancy rules did not change in 2025\u20132026, as at October 2026; what changed were the private entity accounting standard and the IRD\u2019s filing dates. The dated items below affect the statutory audit and the return it supports, from the HKICPA\u2019s April 2025 standard to the 14 July 2026 move of the code D deadline.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Date<\/th><th>Change<\/th><th>Effect<\/th><\/tr><\/thead><tbody><tr><td>April 2025<\/td><td>HKICPA issues the revised HKFRS for Private Entities<\/td><td>Mandatory for annual periods from 1 January 2027; early adoption allowed<\/td><\/tr><tr><td>1 April 2026<\/td><td>IRD issues 2025\/26 returns; in-scope multinational group entities must e-file<\/td><td>Audited accounts and tax computation still go with returns showing gross income<\/td><\/tr><tr><td>14 July 2026<\/td><td>IRD extends code D 2025\/26 returns<\/td><td>Paper 31 August 2026 (was 17 August); e-filed 2 October 2026 (was 17 September)<\/td><\/tr><tr><td>16 November 2026<\/td><td>Code M 2025\/26 paper returns due<\/td><td>31 March 2026 audits must be signed first; listed loss cases run to 1 February 2027<\/td><\/tr><tr><td>1 January 2027<\/td><td>Revised HKFRS for Private Entities and HKFRS 18 take effect<\/td><td>First years starting 1 January 2027 (December year-ends) or 1 April 2027 (March year-ends)<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">How to complete a Hong Kong statutory audit and file the return, step by step<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A Hong Kong statutory audit runs from the year-end through the profits tax return to the AGM, and the order matters because the reporting tier and any members\u2019 approval must be settled before the accounts are drafted. Most private companies with a tax representative follow these eight steps each year, starting as soon as the books for the financial year are closed.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Confirm the financial year-end: the last day of the accounting reference period, unless the directors have changed the accounting reference date (ss.367, 371).<\/li>\n\n<li>Test the tier on year-end figures (group figures for a holding company) and file any approval within 15 days.<\/li>\n\n<li>Check that the auditor is a practice unit on the AFRC register and properly appointed.<\/li>\n\n<li>Prepare the financial statements and directors\u2019 report under the chosen framework.<\/li>\n\n<li>Give the auditor full records; misleading an auditor is an offence (s.413).<\/li>\n\n<li>The directors approve the statements and the auditor signs its report (s.406).<\/li>\n\n<li>File BIR51 with the audited statements and tax computation by the code N, D or M date.<\/li>\n\n<li>Lay the accounts at the AGM within 9 months, or by written resolution, reappoint the auditor and keep the records for 7 years.<\/li>\n<\/ol>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Hong Kong audit and filing checklist<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The auditor and the IRD expect the size tests, the members\u2019 approvals and the underlying records to be ready before fieldwork starts. Missing approvals matter most: without a valid 75% resolution, a company above the small private company limits is outside the exemption, and simplified accounts prepared on that basis do not comply. Have these items ready before the engagement starts.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Size-test workings for this year and the last: revenue, total assets and employees.<\/li>\n\n<li>Any 75% resolution or unanimous agreement, with proof of filing within 15 days.<\/li>\n\n<li>Any business review opt-out resolution, passed at least 6 months before the year-end.<\/li>\n\n<li>The auditor\u2019s engagement letter and an AFRC registration check.<\/li>\n\n<li>Ledgers with daily receipts and payments, assets and liabilities, and stock records for goods traders.<\/li>\n\n<li>Bank statements, invoices, receipts and vouchers for every account.<\/li>\n\n<li>Loan, lease and intercompany agreements and the fixed asset register.<\/li>\n\n<li>Prior-year audited accounts, tax computation and IRD assessments.<\/li>\n\n<li>If books are kept abroad: 6-monthly accounts and returns held in Hong Kong.<\/li>\n<\/ul>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Record-keeping duties and penalties for non-compliance<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Directors face fines of up to HK$300,000 for failing to keep, preserve or prepare the required records and financial statements, plus up to 12 months\u2019 imprisonment if the failure is wilful. Accounting records must meet s.373 and be preserved for 7 years after the end of the financial year (s.377); books kept outside Hong Kong require accounts and returns, at intervals of no more than 6 months, to be kept in Hong Kong (s.374). The Inland Revenue Ordinance separately requires at least 7 years of business records (s.51C).<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Breach<\/th><th>Provision<\/th><th>Maximum penalty<\/th><\/tr><\/thead><tbody><tr><td>Accounting records not kept<\/td><td>Cap. 622 s.373(5)\u2013(6)<\/td><td>HK$300,000; if wilful, plus 12 months\u2019 imprisonment<\/td><\/tr><tr><td>Books abroad without 6-monthly accounts in Hong Kong<\/td><td>Cap. 622 s.374(4)\u2013(5)<\/td><td>HK$300,000; if wilful, plus 12 months<\/td><\/tr><tr><td>Records not preserved for 7 years<\/td><td>Cap. 622 s.377(3)\u2013(4)<\/td><td>HK$300,000; if wilful, plus 12 months<\/td><\/tr><tr><td>Financial statements not prepared as required<\/td><td>Cap. 622 s.379(4)\u2013(5)<\/td><td>HK$300,000; if wilful, plus 12 months<\/td><\/tr><tr><td>Misleading, false or deceptive statement to the auditor<\/td><td>Cap. 622 s.413(4)<\/td><td>HK$150,000 and 2 years on indictment<\/td><\/tr><tr><td>Auditor\u2019s removal not notified within 15 days<\/td><td>Cap. 622 s.419(5)<\/td><td>HK$10,000 plus HK$300 a day<\/td><\/tr><tr><td>Insufficient business records<\/td><td>Inland Revenue Ordinance s.51C<\/td><td>HK$100,000<\/td><\/tr><tr><td>Profits tax return late without reasonable excuse<\/td><td>Inland Revenue Ordinance ss.80(2), 82A<\/td><td>HK$10,000 plus treble the tax undercharged, or additional tax up to treble<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Common Hong Kong audit mistakes<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Most audit problems in Hong Kong come from confusing simplified reporting with no reporting, from applying the size tests to the wrong entity, and from leaving fieldwork too late for the block extension date. Each of them can make the accounts non-compliant or the profits tax return invalid, and several expose directors personally to the fines set out in the penalties table above.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Treating the reporting exemption as an audit exemption; only dormancy removes the audit.<\/li>\n\n<li>Filing BIR51 without audited accounts because gross income is under HK$2 million.<\/li>\n\n<li>Testing a holding company on its own figures instead of the group\u2019s.<\/li>\n\n<li>Passing the 75% resolution without special notice, or with a member voting against.<\/li>\n\n<li>Not filing the resolution or unanimous agreement within 15 days.<\/li>\n\n<li>Appointing an auditor with a lapsed AFRC registration, or a company officer or employee.<\/li>\n\n<li>Claiming dormancy while bank charges or intercompany recharges still run through the company.<\/li>\n\n<li>Starting the audit too late for 16 November 2026, the code M filing date.<\/li>\n<\/ul>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Hong Kong audit terms explained<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">These terms appear in the Companies Ordinance, in HKICPA standards and in IRD circulars on audit and reporting. Several of them sound alike but carry different consequences, notably the small private company and the eligible private company, which share one exemption but differ in their size limits and in whether members must approve the exemption by resolution at a general meeting.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Practice unit: a CPA (practising), CPA firm or corporate practice registered with the AFRC.<\/li>\n\n<li>Reporting exemption: the Cap. 622 regime (ss.359\u2013366) allowing simplified financial statements and reports.<\/li>\n\n<li>Small private company: meets two of HK$100 million revenue, HK$100 million assets and 100 employees.<\/li>\n\n<li>Eligible private company: within HK$200 million revenue and assets and 100 employees, exempt by 75% resolution.<\/li>\n\n<li>SME-FRS: the HKICPA\u2019s Small and Medium-sized Entity Financial Reporting Framework and Financial Reporting Standard.<\/li>\n\n<li>HKFRS for Private Entities: the HKICPA standard for entities without public accountability; revised from 1 January 2027.<\/li>\n\n<li>Dormant company: a qualified private company registered as dormant by special resolution, with no accounting transactions.<\/li>\n\n<li>Special notice: advance notice to the company of certain resolutions, such as removing an auditor.<\/li>\n\n<li>Accounting date code: the IRD\u2019s N, D or M code setting a represented company\u2019s extended filing date.<\/li>\n<\/ul>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-faq has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Frequently asked questions<\/h2>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Does a Hong Kong company with no revenue need an audit?<\/summary>\n<p class=\"wp-block-paragraph\">Yes, unless it has registered as dormant. A company with any accounting transaction in the year, such as bank charges, a director\u2019s loan or a paid expense, cannot be dormant for that period, so it must prepare audited financial statements even with nil revenue. The IRD requires the audited accounts with the profits tax return from every corporation with gross income, including those under HK$2 million.<\/p>\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Can a Hong Kong company use the SME-FRS if its revenue is above HK$100 million?<\/summary>\n<p class=\"wp-block-paragraph\">Yes, in two cases. A company within HK$200 million of revenue and total assets and 100 employees (any two tests) qualifies as an eligible private company if members holding 75% of the voting rights resolve on special notice and none votes against. A private company outside any group can also use the exemption for one year, at any size, if every member agrees in writing.<\/p>\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Can a Hong Kong subsidiary of a foreign group use the reporting exemption?<\/summary>\n<p class=\"wp-block-paragraph\">Yes, if it passes the size tests on its own figures. The Companies Registry confirms that subsidiaries, even of listed groups, can qualify unless excluded by s.359(4), as banks, licensed corporations and insurers are. The unanimous-agreement route is closed to subsidiaries. A Hong Kong holding company is tested on its whole group, which may include non-Hong Kong companies.<\/p>\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Can a company\u2019s own accountant or director audit its accounts?<\/summary>\n<p class=\"wp-block-paragraph\">No. Only a practice unit registered with the AFRC can be appointed auditor, and an officer or employee of the company, or a partner or employee of one, is disqualified (s.393). Only a CPA (practising) may sign the audit report. An in-house accountant can keep the books and draft the statements, but an independent practice unit must audit them.<\/p>\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>How do I change a Hong Kong company\u2019s auditor?<\/summary>\n<p class=\"wp-block-paragraph\">Either the auditor resigns or members remove it. A resigning auditor gives written notice with a statement of circumstances, and the company files Form NA2 within 15 days. Removal needs an ordinary resolution at a general meeting on special notice, with Form NA1 filed within 15 days. Members then appoint the replacement, or the directors fill a casual vacancy.<\/p>\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>When must a December year-end company finish its audit?<\/summary>\n<p class=\"wp-block-paragraph\">In time to file the profits tax return and to lay the accounts at the AGM within 9 months, by 30 September. For 2025\/26, code D returns lodged by tax representatives were due by 31 August 2026 on paper or 2 October 2026 electronically, after the IRD\u2019s 14 July 2026 extension. The Companies Ordinance sets no separate audit deadline.<\/p>\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>What ends a Hong Kong company\u2019s dormant status?<\/summary>\n<p class=\"wp-block-paragraph\">Either the company delivers a special resolution stating that it intends to enter into an accounting transaction, or such a transaction happens. An accounting transaction is anything that must be entered in the accounting records, except paying a fee required by an Ordinance. From that date the audit, AGM and annual return duties apply again.<\/p>\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Does the revised HKFRS for Private Entities apply to 2026 accounts?<\/summary>\n<p class=\"wp-block-paragraph\">Only if the company adopts it early. The HKICPA issued it in April 2025, and it is mandatory for annual periods beginning on or after 1 January 2027: the year to 31 December 2027 for a December year-end, or the year from 1 April 2027 for a March year-end. Companies using the SME-FRS are not affected.<\/p>\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>How long must a Hong Kong company keep its accounting records?<\/summary>\n<p class=\"wp-block-paragraph\">For 7 years after the end of the financial year they relate to (Cap. 622 s.377), and at least 7 years under section 51C of the Inland Revenue Ordinance. A director who fails to take reasonable steps to preserve them faces a fine of up to HK$300,000, plus 12 months\u2019 imprisonment if wilful; inadequate tax records carry a fine of up to HK$100,000.<\/p>\n<\/details>\n\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose vv-sources has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n\n<h2 class=\"wp-block-heading\">Sources<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Figures in this article were checked against these sources on 8 October 2026. Rates, fees and deadlines change, so confirm the current position with the authority before acting.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Companies Registry (FAQ, Companies Ordinance), <a href=\"https:\/\/www.cr.gov.hk\/en\/faq\/companies-ordinance\/co-account-audit.htm\" rel=\"noopener\" target=\"_blank\">Accounts and Audit<\/a><\/li>\n\n<li>Companies Registry, <a href=\"https:\/\/www.cr.gov.hk\/en\/companies_ordinance\/docs\/part9-e.pdf\" rel=\"noopener\" target=\"_blank\">Companies Ordinance (Ord. No. 28 of 2012), Part 9: Accounts and Audit<\/a><\/li>\n\n<li>Companies Registry, <a href=\"https:\/\/www.cr.gov.hk\/en\/companies_ordinance\/docs\/part1-e.pdf\" rel=\"noopener\" target=\"_blank\">Companies Ordinance (Ord. No. 28 of 2012), Part 1: Preliminary<\/a><\/li>\n\n<li>Companies Registry (FAQ, Local Limited Companies), <a href=\"https:\/\/www.cr.gov.hk\/en\/faq\/local-company\/dormant-companies.htm\" rel=\"noopener\" target=\"_blank\">Dormant Companies<\/a><\/li>\n\n<li>Companies Registry (FAQ, Companies Ordinance), <a href=\"https:\/\/www.cr.gov.hk\/en\/faq\/companies-ordinance\/meeting-resolution-company-record.htm\" rel=\"noopener\" target=\"_blank\">Meetings, Resolutions and Company Records<\/a><\/li>\n\n<li>Inland Revenue Department (IRD), <a href=\"https:\/\/www.ird.gov.hk\/eng\/tax\/ptr_fr.htm\" rel=\"noopener\" target=\"_blank\">Warm Reminder on Profits Tax Return Filing Requirements<\/a><\/li>\n\n<li>Inland Revenue Department (IRD), <a href=\"https:\/\/www.ird.gov.hk\/eng\/pdf\/bel26e.pdf\" rel=\"noopener\" target=\"_blank\">Block Extension Scheme for Lodgement of 2025\/26 Tax Returns (circular letter to tax representatives)<\/a><\/li>\n\n<li>Inland Revenue Department (IRD), <a href=\"https:\/\/www.ird.gov.hk\/eng\/pdf\/bel26ea.pdf\" rel=\"noopener\" target=\"_blank\">Block Extension Scheme for Lodgement of 2025\/26 Tax Returns (further extension for \u2018D\u2019 code returns, 14 July 2026)<\/a><\/li>\n\n<li>Inland Revenue Department (IRD), <a href=\"https:\/\/www.ird.gov.hk\/eng\/tax\/bus_rke.htm\" rel=\"noopener\" target=\"_blank\">Record Keeping<\/a><\/li>\n\n<li>Inland Revenue Department (IRD), <a href=\"https:\/\/www.ird.gov.hk\/eng\/pol\/ppo.htm\" rel=\"noopener\" target=\"_blank\">Penalty Policy<\/a><\/li>\n\n<li>Accounting and Financial Reporting Council (AFRC), <a href=\"https:\/\/www.afrc.org.hk\/en-hk\/news-centre\/press-releases\/afrc-urges-cpas-practising-cpa-firms-and-corporate-practices-to-renew-registrations-by15-december2022\" rel=\"noopener\" target=\"_blank\">AFRC urges CPAs (Practising), CPA Firms and Corporate Practices to renew registrations by 15 December 2022<\/a><\/li>\n\n<li>Hong Kong Institute of Certified Public Accountants (HKICPA), A Plus, <a href=\"https:\/\/aplus.hkicpa.org.hk\/2025-issue-3-an-overview-of-the-revised-hkfrs-for-private-entities-accounting-standard\/\" rel=\"noopener\" target=\"_blank\">An overview of the revised HKFRS for Private Entities Accounting Standard<\/a><\/li>\n\n<li>Hong Kong Institute of Certified Public Accountants (HKICPA), <a href=\"https:\/\/www.hkicpa.org.hk\/en\/Thought-leadership\/Major-standard-setting-projects\/HKFRS-18\" rel=\"noopener\" target=\"_blank\">HKFRS 18 Presentation and Disclosure in Financial Statements<\/a><\/li>\n\n<li>Hong Kong Institute of Certified Public Accountants (HKICPA), Taxation Faculty, <a href=\"https:\/\/www.hkicpa.org.hk\/en\/Professional-development\/Specialist-Practice-Development\/Specialist-faculties\/TF\/Profits-Tax-Filing-for-2022-2023\" rel=\"noopener\" target=\"_blank\">Profits Tax Filing for 2022\/2023<\/a><\/li>\n<\/ol>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-prose vv-related has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n\n<h2 class=\"wp-block-heading\">Related services and insights<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/vivosgroup.com\/hk\/services\/accounting-tax\/\">Hong Kong accounting and tax<\/a> \u2014 Audit preparation, profits tax computations and profits tax return filing<\/li>\n\n\n\n<li><a href=\"https:\/\/vivosgroup.com\/hk\/services\/corporate-secretarial\/\">Hong Kong corporate secretarial services<\/a> \u2014 AGMs, members\u2019 resolutions, annual returns and Companies Registry filings<\/li>\n\n\n\n<li><a href=\"https:\/\/vivosgroup.com\/hk\/insights\/hong-kong-company-annual-compliance-calendar\/\">Hong Kong company annual compliance calendar<\/a> \u2014 Every 2026 annual return, AGM and profits tax deadline in one place<\/li>\n\n\n\n<li><a href=\"https:\/\/vivosgroup.com\/hk\/contact\/\">Talk to VIVOS Hong Kong<\/a> \u2014 Hong Kong office<\/li>\n<\/ul>\n\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull vv-section vv-section--navy vv-section--tight has-global-padding is-layout-constrained wp-container-core-group-is-layout-2eebee45 wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading\">Need your Hong Kong audit signed off before the 16 November 2026 filing date?<\/h2>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button vv-btn-gold\"><a class=\"wp-block-button__link wp-element-button\" href=\"\/hk\/contact\/\">Talk to our team<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n<script type=\"application\/ld+json\">{\"@context\":\"https:\/\/schema.org\",\"@type\":\"FAQPage\",\"mainEntity\":[{\"@type\":\"Question\",\"name\":\"Does a Hong Kong company with no revenue need an audit?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Yes, unless it has registered as dormant. 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