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IB and Etrade giving informations to accountants/auditors ??
- Thread starter luisHK
- Start date
It sounds like you are trying to satisfy a regulator. Figure out the standard you need to meet and then present the numbers you need to meet it in a format that satisfies the requirements.
It is your presentation. Auditors are there to verify what you present not tell you what to present. At least that is so in the US.
It is your presentation. Auditors are there to verify what you present not tell you what to present. At least that is so in the US.
Quote from luisHK:
Do you know if it's also standard procedure to calculate the PnL and detail the trading activity for EACH security or a global PnL is enough, or at least a global PnL for each market concerned ?
Well, actually in this case the company accoutant and the auditor work for the same company, and the accountant says he needs to detail the operations for each security. I can't imagine the costs for HFTs... i'm so fed up ith this CPA i'm closing the company, but I still need to finalise the costs for the 2 last fiscal years and wonder what are the requirements ( if we had started differently, and with other CPAs in HK, it would have been a much easier process).
I don't think either the reporting requirements in HK are tougher than in the US or UK , hence I'm also curious about the process in the US or UK to compare.
I don't think either the reporting requirements in HK are tougher than in the US or UK , hence I'm also curious about the process in the US or UK to compare.
In the US it is impossible for the accountant and the auditor to work for the same company or in any way be related parties. audits MUST be done by independent auditors. Once an accountant makes even a single entry in a firms books he is barred from auditing those books. I suspect the same is true in the UK.
Quote from luisHK:
Well, actually in this case the company accoutant and the auditor work for the same company, and the accountant says he needs to detail the operations for each security. I can't imagine the costs for HFTs... i'm so fed up ith this CPA i'm closing the company, but I still need to finalise the costs for the 2 last fiscal years and wonder what are the requirements ( if we had started differently, and with other CPAs in HK, it would have been a much easier process).
I don't think either the reporting requirements in HK are tougher than in the US or UK , hence I'm also curious about the process in the US or UK to compare.
Quote from luisHK:
Well, actually in this case the company accoutant and the auditor work for the same company, and the accountant says he needs to detail the operations for each security. I can't imagine the costs for HFTs... i'm so fed up ith this CPA i'm closing the company, but I still need to finalise the costs for the 2 last fiscal years and wonder what are the requirements ( if we had started differently, and with other CPAs in HK, it would have been a much easier process).
I don't think either the reporting requirements in HK are tougher than in the US or UK , hence I'm also curious about the process in the US or UK to compare.
http://www.ird.gov.hk/eng/pdf/e51notes.pdf
says that an audit is not required if yours is a small corporation with gross income under 2,000,000 HKD. Are you over that?
Even if an audit is required, I doubt that an itemization of every trade is required.
I would think that they should be treating your trading as trading, ie. routine business transactions, not as individual capital investments.
They may just be ripping you off by performing unnecessary services, or by failing to classify your trading as a business rather than as capital investments.
Thanks both for your reply.
Actually it seems that for small corporations, joining the audit to the Profit Tax Returns is not required, but auditing the accounts is still necessary :
http://www.gov.hk/en/residents/taxes/etax/faq/faq_about_efiling_pfr.htm#/q10
"Are the accounts of a âsmall corporationâ with gross income not exceeding $2,000,000 not required to be audited?"
No. A âsmall corporationâ does not need to submit supporting documents which include the audited accounts when filing its profits tax return. However, its accounts are not exempted from being audited if they are so required by law. You have to state the name of the auditor who prepared your auditorâs report and the date of the auditorâs report in Item 7.1 of your return if your accounts are required to be audited by law. "
This doesn't change the fact they probably could adopt a simpler accounting and would apreciate feedback from anyone familiar with the issue, but in the link provided by Comintel the accounting requirements are not quite clear. As I wrote in an above post, there is much space for interpretation in HK tax reporting requirements. Some CPAs do not not audit any account nor perform any accounting as long as the business activity remain offshore . I will definetely reopen with one of those if setting up a new HK company.
Actually it seems that for small corporations, joining the audit to the Profit Tax Returns is not required, but auditing the accounts is still necessary :
http://www.gov.hk/en/residents/taxes/etax/faq/faq_about_efiling_pfr.htm#/q10
"Are the accounts of a âsmall corporationâ with gross income not exceeding $2,000,000 not required to be audited?"
No. A âsmall corporationâ does not need to submit supporting documents which include the audited accounts when filing its profits tax return. However, its accounts are not exempted from being audited if they are so required by law. You have to state the name of the auditor who prepared your auditorâs report and the date of the auditorâs report in Item 7.1 of your return if your accounts are required to be audited by law. "
This doesn't change the fact they probably could adopt a simpler accounting and would apreciate feedback from anyone familiar with the issue, but in the link provided by Comintel the accounting requirements are not quite clear. As I wrote in an above post, there is much space for interpretation in HK tax reporting requirements. Some CPAs do not not audit any account nor perform any accounting as long as the business activity remain offshore . I will definetely reopen with one of those if setting up a new HK company.
Quote from luisHK:
Thanks both for your reply.
Actually it seems that for small corporations, joining the audit to the Profit Tax Returns is not required, but auditing the accounts is still necessary :
http://www.gov.hk/en/residents/taxes/etax/faq/faq_about_efiling_pfr.htm#/q10
"Are the accounts of a âsmall corporationâ with gross income not exceeding $2,000,000 not required to be audited?"
No. A âsmall corporationâ does not need to submit supporting documents which include the audited accounts when filing its profits tax return. However, its accounts are not exempted from being audited if they are so required by law. You have to state the name of the auditor who prepared your auditorâs report and the date of the auditorâs report in Item 7.1 of your return if your accounts are required to be audited by law. "
Sure they're just saying that if there is some special provision of law that requires audits of a particular unusual type of small business, for example a bank or a trust company, then they are not relieved of such a requirement.
But an ordinary small corporation does not have to be audited in almost any country. Isn't yours just a plain vanilla small corporation?
I do not see any question of interpretation. Unless the accounting firm can cite some law that requires an audit, then none is required and if I were you I would not give ground on that.
The instructions also state quite clearly that no audit is required if the business activities of the corporation are offshore. Again, I do not see any ambiguity there either.
I imagine that if you phone the tax authorities there they would be happy to clarify....