What information must directors and staff give the auditor, and what if they refuse?
The auditor has a right to access the company's accounting records and can require officers, employees and other related people to provide information they reasonably need. Not providing it is an offence, and so is knowingly or recklessly giving false or misleading answers.
The auditor's rights (s.412)
- Access to the company's accounting records.
- To require related entities (including officers, employees and past officers or employees at the relevant time) to provide information or explanation reasonably needed for the audit. They must respond as soon as practicable.
- For overseas subsidiaries, the auditor can require the company to obtain information from the subsidiary, its officers, auditors and record holders.
- The auditor also has rights in relation to general meetings (s.411).
Offences (s.413)
- Failing to supply information when required: a level 4 fine (HK$25,000), plus HK$700 a day if it continues. It is a defence to show it was not reasonably practicable.
- Giving a statement that is false, misleading or deceptive in a material respect, knowing it is or being reckless: up to HK$150,000 and 2 years' imprisonment on indictment, or a level 5 fine (HK$50,000) and 6 months on summary conviction.
Limits Legal professional privilege is not overridden (s.412(8)).
What happens in the audit report If the auditor cannot obtain all necessary and material information and explanations, they must say so in the report (s.407(3)). This can lead to a qualified opinion or a disclaimer, which lenders and IRD may question.
Respond to queries in writing, in good time, and keep a copy.
Legal basis
- Companies Ordinance (Cap. 622), ss.407(3), 411, 412, 413
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
- What if my company has no auditor, or the auditor position becomes vacant?The directors can fill a casual vacancy; if they have not done so within one month, the members can by resolution at a general meeting. If nobody is appointed, a member can apply to the Court to appoint an auditor.
- What happens if my Hong Kong company does not get audited?The directors are exposed to fines under the Companies Ordinance for failing to take reasonable steps to prepare compliant financial statements, and the accounts cannot be properly laid before members. IRD can also pursue the missing return. There is no separate offence for failing to appoint an auditor; the exposure arises through the accounts and filing duties.
- Does every Hong Kong limited company need an audit?Yes. Every Hong Kong company must have an auditor for each financial year and its financial statements audited, whatever its size or whether it trades. The only company that escapes is a qualifying private company that has validly become dormant under s.5 and s.447 of the Companies Ordinance.
- Do I still need an audit if my company had no revenue or no business activity?Yes, unless the company has formally become dormant. Having no sales does not make a company dormant in law. If it had any expenses, bank charges or other recorded transactions, the audit duty continues for that year.
- My company is loss-making. Do I still need to audit it?Yes. Profit or loss has no bearing on the audit requirement. A loss-making company is audited every year, and the auditor will also look closely at going concern.