Is there an audit exemption for small companies in Hong Kong?

Hong Kong has no size-based audit exemption. Each company is a separate legal person with limited liability, so the law wants an independent professional to give an opinion on its accounts every year.

What the audit report covers (ss.405-407)

• Whether the financial statements have been properly prepared in line with the Ordinance.
• For companies not in the reporting exemption, whether they give a true and fair view.
• Whether the directors' report is consistent with the accounts.
• Whether adequate accounting records were kept and the accounts agree with them.
• Whether the auditor obtained all the information and explanations needed.

Who relies on it Members who do not run the business, lenders deciding on credit, counterparties, and the Inland Revenue Department, which asks for audited statements with the profits tax return for companies that have gross income (other than dormant companies).

What reforms did instead of dropping audit The 2014 Companies Ordinance created a "reporting exemption" so qualifying small companies can use a simpler framework and a lighter audit opinion. The Registry's FAQ is explicit that such companies are still audited.

If you are the only shareholder and director, the audit can feel like a formality, but the legal duty is the same.