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Fees for auditing of HK Limited Company. Thoughts please?

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  1. #1

    Join Date
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    Question Fees for auditing of HK Limited Company. Thoughts please?

    Hi all. We have been using the same auditor for our Limited Company for the past few years, however not sure if we've been getting a good deal? We only have our experiences in Australia to compare it against and the price goes up each year here without much variation in the number of entries/transactions. The only thing really keeping us there is that the same company takes care of all our visa/immigration stuff as well, and have done so since day dot. Also, does anyone else find the whole process a little confusing? Never really seem to have a firm grasp on what it is we're being charged for, despite their explanation/s? By that, I mean even though we get a quote, we often get 'sundry' fees and charges throughout the year.

    One of the other issues that occurs each year is when our tax advisory and prep is done, they send us the amount owing to the IRD with an invoice for our preparation fee (from them), but then they tell us that for an extra (substantial) fee, they can save us $xxxxx on the amount of tax payable? Is this normal practice? Wouldn't you just prepare your client's tax so that they're paying the least amount possible from the outset? Below is the quote we've just received. We may well be getting a reasonable deal, but as mentioned previously, just curious to know what others pay in comparison. Would appreciate your thoughts and/or personal experience. TIA.


    Accounting
    Accounting Management Reports
    - For the Year from 1 Jan 2015 to 31 Dec 2015
    - Total: 12 months
    - Subject to number of monthly transaction less than 60
    Cost: HK$12,600

    Auditing
    Audited Financial Statements
    - For the Year ended 31 Dec 2015
    - Subject to turnover/ investment value being below HK$3,000,000
    Cost: HK$6,300

    Tax
    Tax Advisory and Arrangement
    - Preparation of tax proposal with detailed tax calculation and projection,
    - Co-ordination of Accounting Reports to well match mentioned tax arrangement,
    - Preparation of required documents to fulfill the status of Tax Arrangement,
    - Filing and Submission of documents to state the Tax Status to fulfil the IRD requirements.
    Cost: HK$16,000

    Tax
    Filing and Submission of Employer’s Return (in Apr 2016)
    - For the Year of Assessment 2015/2016
    - Inclusive of reporting for 2 Directors
    - Complimentary upon confirmation of Tax Arrangement Service in advance
    Cost: N/A

    Tax
    Filing and Submission of Directors’ Individual Tax Returns (in May 2016)
    - For the Year of Assessment 2015/2016
    - Inclusive of reporting for 2 Directors
    - Complimentary upon confirmation of Tax Arrangement Service in advance
    Cost: N/A


    Total: HK$34,900


  2. #2

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    Doesn't look expensive to me. You do need all that stuff (well, except for the directors returns which they could do themselves and takes about 5 minutes).

    No need for accountants to deal with visa issues though. They are trivial and easily done yourself.


  3. #3

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    It does surprise me though if they do the accounts AND the audit - I think its better practise to have someone else audit the accounts. Our accountant arranges this with another firm they know, but they don't do it themselves.


  4. #4

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    The audit fee seems cheap, for the accounting could you not do the book keeping yourselves?

    The tax filing fee seems expensive. For comparison i work for a very active CSP however we do our own book keeping as we have the necessary software to make this painless.

    For the y/e 2014 our audit fee was 10,300 and our tax filing fee was just 2,200 and like i said this is for a fairly complex and active trading company in Hong Kong. I have been informed that the audit fee has increased slightly for 2015 but not aware of how much yet.

    HK_Katherine likes this.

  5. #5

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    Quote Originally Posted by HK_Katherine:
    It does surprise me though if they do the accounts AND the audit - I think its better practise to have someone else audit the accounts. Our accountant arranges this with another firm they know, but they don't do it themselves.
    They may have two entities, one that handles the book keeping such as a Corporate Service provider and then an affiliated CPA audit firm. Otherwise yes i agree they should be independent of each other.

  6. #6

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    Yes I thought the tax filing fee was on the high side, but the accounting fee was on the low side so I assumed the creation of the annual reports was probably in the tax portion rather than the accounting portion. Plus those other two (low value, imho) items probably bumped up the price.


  7. #7

    Join Date
    Aug 2009
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    accounting and audit looks ok to me but i am not clear why you need that tax advisory thing?

    as part of their audit report i believe it's mandatory for them to calculate/produce a tax calculation for the company, which you can then send off to the government (electronically?) yourself.