Who prepares and approves a Hong Kong company's financial statements?

Preparation. Section 379 puts the duty on the directors. They may use an in-house finance team, a bookkeeper, or an outside accountant to do the work, but responsibility stays with the board. If the company is a holding company it must prepare consolidated statements, with exceptions for certain subsidiaries (s.379(2)-(3)).

Approval and signature (s.387).

• The directors approve the statement of financial position.
• It is signed by two directors on the board's behalf, or by the director if there is only one.
• Every copy circulated must state the name of the signatory. Failing this is an offence with a level 4 fine (HK$25,000) for the company and responsible persons.

Directors' report. Signed by a director or the company secretary (s.391).

Audit. An independent auditor must be appointed for each financial year (s.394), except for a dormant company, and reports to members. The auditor is separate from whoever prepares the accounts.

Directors who fail to take all reasonable steps to ensure statements are prepared as required can be fined HK$300,000 (and jailed up to 12 months if wilful), so it is not safe to sign without reviewing the figures.