Who prepares and approves a Hong Kong company's financial statements?
The directors are legally responsible for preparing them (s.379), usually with help from an accountant. The statement of financial position must be approved by the directors and signed by two directors, or by the sole director. An independent auditor then reports on the 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 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) 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.
Legal basis
- Companies Ordinance (Cap. 622), ss.379, 387, 391, 394
Sources
Applies to 2026 · Last reviewed 29 October 2026
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.
Related questions
- Is a Hong Kong company legally required to keep accounting records?Yes. Section 373 of the Companies Ordinance (Cap. 622) requires every company to keep accounting records that explain its transactions and show its financial position and performance at any time. Directors who fail to take all reasonable steps risk a fine of HK$300,000, and up to 12 months' jail if the failure is wilful.
- How long must a Hong Kong company keep its accounting records?Seven years. Under section 377 of the Companies Ordinance, a company must keep its accounting records for 7 years after the end of the financial year to which the last entry relates. The Inland Revenue Department separately requires business records to be kept at least 7 years after the transactions they relate to.
- What does section 51C of the Inland Revenue Ordinance require from my business?Anyone carrying on a trade, profession or business in Hong Kong must keep enough records, in English or Chinese, to work out assessable profits, and keep them for at least 7 years. Failing to do so without reasonable excuse can lead to a fine of up to HK$100,000.
- Which documents should a Hong Kong business keep for its books?Keep every document that supports an entry in your books: sales and purchase invoices, receipts, bank statements, contracts, payroll and MPF records, asset purchase papers, loan agreements, and stocktake sheets. The test is whether someone else could trace any figure back to its source.
- Can a Hong Kong company keep its accounting records digitally or scan paper originals?Yes. The Companies Ordinance allows records in hard copy or electronic form, provided they stay available for reference and can be reproduced on paper. The IRD also accepts electronic books and scanned source documents if integrity, legibility and origin details are preserved, and no prior approval is needed.