In this course · 5 of 7
Course 7
See what the auditor checks
7 lessons · 7 min
- 1What are audit confirmations, and why does the auditor write to my bank?
- 2Will the auditor attend our stock count and check our fixed assets?
- 3How does an audit treat director loans and related-party transactions?
- 4Will an audit check payroll and MPF contributions?
- 5Does the audit cover the Significant Controllers Register?
- 6Why does my auditor ask for ID and source-of-funds information?
- 7Do I need consolidated accounts for my Hong Kong holding company?
The short answer
No. The Significant Controllers Register is a separate Companies Ordinance duty of the company and is not part of the audit report, although auditors may ask who owns and controls the company when assessing related parties and client acceptance.
What the register is Hong Kong companies must keep a register of people with significant control over the company. It is a company duty, kept at the registered office or another place in Hong Kong (notified to the Registrar if it is not the registered office), and not an audit document. A person holding more than 25% of the issued shares, directly or indirectly, is a significant controller.
How it can come up in an audit
- Ownership and related parties: the auditor needs to know who controls the company to identify related-party transactions and disclosures.
- Client acceptance: auditors collect ownership details as part of their own anti-money laundering checks (see the AML answer).
- Representations: management is asked to confirm that related parties have been identified.
Legal basis The register comes from Part 12 of the Ordinance and Schedule 5A, added by the Companies (Amendment) Ordinance 2018 (in force from 1 March 2018). The company enters each significant controller's particulars, or states that there is none, and appoints a designated representative to assist law enforcement officers. The auditor's report duties in ss.405-407 cover the financial statements, the directors' report and the accounting records, not the register. The Companies Registry's FAQ and guideline set out the detailed duties.
Practical tip Keep the register up to date and consistent with the members' register and the annual return. Giving the auditor a consistent picture of ownership avoids queries.
An audit does not replace compliance with the register rules.
Legal basis and sources
The law
- Companies Ordinance (Cap. 622), Part 12 and Schedule 5A
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
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