Client stories

Short reflections

“They found three management recharges that had no cost pack behind them. The wording in the findings letter was careful enough that our audit committee could use it without rewriting.”

— Group financial controller, trading group with HK and Shenzhen entities

“The balance review before year-end cleared two aged items we had rolled forward for eighteen months. I wish we had scheduled it earlier in December; the last week of the close was still tight.”

— Finance manager, logistics group, Kowloon Bay

“Fieldwork at our Causeway Bay office was calm. Sample selections were explained, and the draft discussion did not surprise us with new topics on the final day.”

— CFO, family-owned retail holding company

“We asked only for a management charge support review. They stayed inside that scope and still flagged one intercompany sale cut-off issue as an observation — useful, and clearly marked as outside the formal findings.”

— Head of finance, professional services group

Extended account: clearing a four-entity ledger before statutory audit

A Hong Kong trading company with three subsidiaries approached us eight weeks before their statutory auditor’s interim visit. Intercompany receivables did not match payables by roughly HK$2.1 million across two pairs of entities. Prior year notes had simply labelled the difference as “timing.”

We ran a related-party balance review first, then expanded — with a written variation — into a limited transaction sample for the two largest difference sources. The work showed that one subsidiary had booked a stock transfer as a sale while the counterpart treated it as a consignment movement. Credit notes and revised stock records were prepared by the client’s team; our findings letter documented the sequence and remaining residual of under HK$40,000 pending final stock count.

The statutory auditor accepted the working-paper pack without requesting a second reconstruction. The finance manager noted that the engagement fee was lower than the overtime cost of another unmanaged close cycle — though the December scheduling still compressed their holiday leave plans.

Extended account: head-office recharges under board scrutiny

A board member of a Kwun Tong light-industrial group questioned whether shared HR and IT recharges to three operating companies were supportable. We reviewed twelve months of management charges, allocation keys, and underlying vendor invoices.

Findings included two months where the allocation key shifted without minute approval, and a cluster of software licences billed entirely to one entity while users sat in all three. The board used the letter to approve a revised recharge policy for the following year. We were not asked to redesign the policy; that remained with management.