According to Companies Ordinance (Cap. 32), s. 131(1), each HK company, whenever a private company or a public company, has to appoint auditor. The first auditor can be appointed by the Board before its first annual general meeting and the auditor will hold office only until end of its first annual general meeting. If the Board has not appointed auditor, s. 131(3) and (4) provides that it can be appointed at the shareholders’ meeting.
The auditor will be re-appointed annually at the annual general meeting, it holds office until end of the next annual general meeting. If no auditor is appointed at the annual general meeting, shareholders or members of the company can apply to court for such appointment.
s. 141(1) provides that the auditor of a HK company has to report or read out the auditors’ report and the financial statements (including the balance sheet, profit and loss account, and accounts relating to the company) to the company’s shareholders or members during its tenure of office as auditor of the company.
When preparing the auditors’ report, the auditor has the responsibility to audit the followings about the company’s account before reaching any audit conclusion:-
a. the company’s books or records that have been properly kept and maintained;
b. the profit and loss account as well as the balance sheet statement are in consistency with
the company’s accounting records;
c. the company’s accounting records can reflect facts or fully explain the financial position of
the company in a true and fair view.
s. 141(4) provides that if auditor is in the opinion that the above points (a) to (c) cannot be fulfilled, he or she has to point out in the auditors’ report.