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.
Company law risks
- Directors' duty (s.379): directors must prepare compliant financial statements. A director who fails to take all reasonable steps, in respect of accounts laid before the company or circulated, commits an offence with a fine of HK$300,000. If the failure is wilful, imprisonment for 12 months can apply as well.
- Laying the accounts (s.429): the reporting documents laid before members include the auditor's report (s.357(2)). A director who fails to take all reasonable steps to secure that they are laid in time commits an offence with a fine of HK$300,000, or that plus 12 months' imprisonment if wilful. It is no defence that the statements were not in fact prepared as required.
- Auditor's role: an auditor must be appointed for each financial year (s.394). Without one there is no auditor's report.
- Court appointment: a member can ask the Court to appoint an auditor (s.398).
- Deadlines: private companies must lay and send accounts within nine months of year-end (s.431).
Other consequences
- Banks, buyers and investors may refuse to deal without audited accounts.
- IRD's guidance asks for audited accounts with the return for companies with gross income (see tax answers).
- A filed return without audited accounts is a likely trigger for enquiries.
No separate offence for failing to appoint Sections 394-398 carry no offence of their own. The exposure comes through the offences above and the filing duties. If you are already late, take professional advice.
Best step Appoint an auditor now and agree a catch-up plan; late and multiple years can usually be audited together.
Legal basis
- Companies Ordinance (Cap. 622), ss.357, 379, 394, 398, 429, 431
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 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.
- 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.