At present, many Chinese entrepreneurs will set up Hong Kong companies in Hong Kong, and then invest and hold entity subsidiaries in China. The purpose of such structure allocation is to obtain international assets overseas more conveniently, which can be used for the development of main business in China.

According to the requirements of Hong Kong tax law, every Hong Kong enterprise must be audited by Hong Kong certified public accountants every year on the accounting of the enterprise and produce the audit report, which can be submitted to the Hong Kong Tax Bureau together with the completed profits tax return before tax declaration. In the case of a Hong Kong enterprise controlled investment in its Chinese subsidiary, the Hong Kong head office must consolidate the financial statements of its Chinese subsidiary when doing the audit. In general, Hong Kong accountants only need to present the audit report of the Chinese subsidiary when doing the merger audit, and it is not easy to stipulate that they should present the working papers of the Chinese certified public accountant when applying for the audit. At present, a client in Beijing encountered such a situation. When they authorized the Hong Kong certified public accountant to do the merger audit, they were required to present the audit papers of their Chinese subsidiaries. However, the Chinese accountant indicated that the audit papers were internal archived materials of the accounting company and could not be presented to the public. As a result, the client cannot meet the requirements of the Hong Kong accountant on the audit materials, and the Hong Kong accountant needs to show the opinion of the audit report on this matter in the audit report. When applying for credit business, new project public bidding and other business processes, the audit report of audit report opinion is likely to have a negative impact, and may even cause the situation that the business process can not be applied for.

In the opinion of the technical professional accountants of Lianze, the audit report of the subsidiary signed by the Chinese auditors can support the accurate professional judgment of the Hong Kong accountants in the merger audit of the Hong Kong head office, so they will not give their opinions on the merger audit report. The problem is solved.

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