Audit SME_AA_Ch_38

Audit SME_AA_Ch_38 - Audit of Small Companies 1. 2. 3. 4....

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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 1 Audit of Small Companies 1. Characteristics of Small Company 2. Engagement Considerations 3. Applicability of HKSA and Audit Procedure 4. Auditor’s Report 5. Alternatives to Small Company Audit 6. Overseas Audit Requirements
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 2 1. Characteristics of Small Company IAPS 1005 describes a small entity (including a company) is any entity in which: There is concentration of ownership and management in a small number of individuals (often a single individual) One or more of the following are also found: Few sources of income; Unsophisticated record-keeping; and Limited internal controls together with the potential for management override of controls. In Hong Kong, there is no official definition The HKICPA’s Small and Medium-sized Entity (SME) Framework sets out the qualifying criteria for a SME to apply the SME Financial Reporting Standard (SME Standard) in preparing its financial statements
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 3 The qualifying criteria in SME Framework: a. A company incorporated under the Companies Ordinance qualifies for reporting under the SME Framework if it satisfies the criteria set out in section 141D of that Ordinance. b. An entity, other than a company incorporated under the Ordinance, subject to any specific requirements imposed by the law of the entity’s place of incorporation and subject to its constitution, qualifies for reporting
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This note was uploaded on 12/21/2010 for the course ACCT 410 taught by Professor Sallyli during the Fall '10 term at Hong Kong Shue Yan.

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Audit SME_AA_Ch_38 - Audit of Small Companies 1. 2. 3. 4....

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