How do I change auditors for a Hong Kong company?

Choosing the route

• At year-end, not reappointing: members can resolve not to reappoint, with special notice where required (s.403(2)(c)), or the auditor can decline.
• Mid-term: remove by ordinary resolution with special notice (s.419), or the auditor resigns (s.417).

Steps

1. Pick the new firm, check its AFRC registration and independence, and agree an engagement letter and fee.
2. Tell the outgoing auditor if the change is a removal or non-reappointment; they may deliver a statement of circumstances (ss.424-427).
3. File with the Registrar within 15 days: Form NA1 for removal (s.419(4)) or NA2 for resignation (s.417(3)).
4. Appoint the new auditor (s.396 or s.397), noting the new person does not take office until the previous appointment ends (s.402(2)(a)).
5. Allow the outgoing auditor to give work-related information to the incoming auditor in good faith (s.414).

Professional clearance The HKICPA Code of Ethics asks a prospective accountant to evaluate the threats before accepting an engagement held by another accountant. Depending on the engagement, that may call for direct communication with the existing accountant to establish the reasons for the change.

Avoid Leaving the change late in the year, or changing firms to avoid a qualified opinion. Outgoing auditors' circumstances can be raised with members.