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Analysis of Confirmation in corporate audit in Hong Kong

Released Date: Feb 17,2021 Article Source: HUANZE

In the audit of a company in Hong Kong, there are two aspects of confirmation. On the one hand, it refers to the confirmation of monetary funds of third-party financial institutions (such as banks and securities companies). After receiving the audit information of the customer, we will immediately produce a bank confirmation letter based on the customer's bank account information and send it to the customer to sign the seal or signature that is consistent with the "bank reserved seal or signature" in the confirmation letter. The customer will send the bank deposit confirmation letter to the opening bank, and the bank will send the confirmation letter directly to the auditor in Hong Kong according to the address of the auditor in Hong Kong on the confirmation letter. To ensure the independence and fairness of bank confirmation. If the customer has a bank account without bank confirmation, then the auditor will have reservations about the bank deposits because the fair value of the bank deposits cannot be adequately and appropriately obtained.

In the audit of a company in Hong Kong, there are two aspects of confirmation. On the one hand, it refers to the confirmation of monetary funds of third-party financial institutions (such as banks and securities companies). After receiving the audit information of the customer, we will immediately produce a bank confirmation letter based on the customer's bank account information and send it to the customer to sign the seal or signature that is consistent with the "bank reserved seal or signature" in the confirmation letter. The customer will send the bank deposit confirmation letter to the opening bank, and the bank will send the confirmation letter directly to the auditor in Hong Kong according to the address of the auditor in Hong Kong on the confirmation letter. To ensure the independence and fairness of bank confirmation. If the customer has a bank account without bank confirmation, then the auditor will have reservations about the bank deposits because the fair value of the bank deposits cannot be adequately and appropriately obtained.

The second aspect of confirmation is mainly to confirm the balance of accounts receivable and payables during the audit of a Hong Kong company. This confirmation is also a process of spot check. Each auditor determines the number of clients for confirmation of accounts receivable and payables in the current year according to his or her importance level. This confirmation letter is usually sent to the client together with the audit report to complete the confirmation of the current year. If the confirmation cycle is long, it is possible to communicate with the auditor to prepare the confirmation letter in advance according to the balance of the client's account for confirmation. If the balance of the audit report does not match at the end, it may involve re-confirmation. The confirmation of current items is to inquire whether the balance of the receivable and payable items is real through a third party independent party except the customer, which is also an indispensable audit work in the audit of Hong Kong companies.

Analysis of Confirmation in corporate audit in Hong Kong

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