Will an audit check payroll and MPF contributions?
Yes. Payroll is usually a material cost, so auditors test salary records, employer and employee MPF contributions, accruals for unpaid leave or bonuses, and director remuneration. It is an accounting check, not a full compliance review of employment law.
What the auditor usually looks at
- Payroll listing agreed to the ledger and bank payments.
- MPF contributions: whether the amounts recorded agree with trustee statements and whether any are outstanding at the year-end.
- Accruals: unpaid wages, bonuses, leave pay and any long service or severance liabilities.
- Director remuneration and the disclosure required in the notes (s.383).
- Evidence of staff numbers, which also matters for the "small company" thresholds (average employees not exceeding 100).
What you should prepare
- Payroll summaries for each month, MPF trustee statements and the employer's return documents.
- Employment contracts for key staff.
- Records of any bonuses promised or declared after the year-end.
Limit An audit gives an opinion on the financial statements. It does not certify that you comply with the Employment Ordinance or the MPF law. If the auditor finds unrecorded liabilities, they ask you to adjust the accounts.
The number of payroll items tested is the auditor's judgment, using sampling based on risk and materiality.
Legal basis
- Companies Ordinance (Cap. 622), s.383
- Companies Ordinance (Cap. 622), Schedule 3 (employee numbers)
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
- 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.
- How do I make my Hong Kong company dormant to avoid the audit?Check the company qualifies, pass a special resolution declaring it will become dormant from a stated date, and have the directors deliver that resolution to the Companies Registrar. Dormancy takes effect from the delivery date or the later date in the resolution.
- Does a dormant Hong Kong company still have to file a profits tax return?Dormancy under the Companies Ordinance relieves the company from audited accounts, and IRD accepts a profits tax return from it without the audited statements. It does not by itself cancel the duty to file a return when IRD issues one.