The auditor would start the audit by understanding the business of the company. Follow by collecting the documents as audit evidence such as invoices, goods delivery and receipt notes, sales and purchases contracts, purchase orders, sales orders, rental agreements, bank-in slips, bank statements, bank loan agreements, financial breakdowns to support the figures disclose in the financial statements. In addition, audit confirmation would be performed with a bank, account receivable and payables to verify year-end balances. Of course, some other auditing testing and audit procedures would be performed as well. Enquiries would be made to the management during the audit. The auditor would give an audit opinion in the audit report whether financial statements are fairly stated in accordance with Accounting Standards, and whether the statements contain material errors or other misstatements.
After completing the audit, an auditor would prepare an audit report with tax computation and complete profits tax return for company directors’ review and confirmation. The company directors will then sign the audit report. This, along with your PTR, is sent to the government – Hong Kong Inland Revenue Department (IRD) to keep on record.