Does a loss-making Hong Kong company need an audit, and does going concern matter?

The audit duty depends on the company being a company, not on whether it earns a profit. Section 394 requires an auditor for every financial year.

What changes when a company is loss-making

• Going concern. The auditor must consider whether the company can keep operating for at least twelve months from the date of the financial statements, looking at cash, creditors and shareholder or bank support. If there is doubt, the directors have to disclose it and the audit report may refer to it.
• Director and shareholder support. Auditors commonly ask for a letter confirming ongoing financial support from shareholders or directors where liabilities exceed assets. This is a standard request rather than a Hong Kong legal rule, so exact wording varies by firm.
• Bank facilities. Lenders often ask for audited accounts and may react to a going-concern note.

Tax angle (pointer only) IRD still expects the return, supported by audited statements where the company has gross income. How losses are treated in the tax computation is a profits tax question. For a company with no revenue at all, see the answer on companies with no business.

Time limit Delays do not help. Late accounts still count as late, and the loss position does not extend the Companies Ordinance deadline.