The Audit Commission is established under the Basic Law, which provides
that the Audit Commission shall function independently and be accountable
to the Chief Executive of the HKSAR. The Audit Commission is one of Hong
Kong's oldest departments. The first Auditor-General was appointed in
The Audit Ordinance, enacted in 1971, provides for
the audit of the Government's accounts by the Director of Audit and for
the submission of his report to the President of the Legislative Council.
The Director also audits the accounts of the Exchange Fund, the Hong Kong
Housing Authority, five trading funds and more than 60 statutory and non-statutory
funds and other public bodies. Furthermore, the Director reviews the financial
aspects of the operations of the multifarious government-subvented organisations.
The Director of Audit carries out two types of audit:
regularity audits and value-for-money audits. Regularity audits are intended
to provide an overall assurance of the general accuracy and propriety
of the financial and accounting transactions of the Government and other
audited bodies. The Audit Ordinance gives the Director statutory authority
to conduct regularity audits.
Value-for-money audits are intended to provide independent
information, advice and assurance about the economy, efficiency and effectiveness
with which any bureau of the Government Secretariat, department, agency,
other public body, public office or audited organisation has discharged
its functions. Except for some public organisations where the Director
of Audit has obtained statutory authority to conduct value-for-money audits
in the respective ordinances, value-for-money audits are carried out according
to a set of guidelines tabled in the Provisional Legislative Council by
the Chairman of the Public Accounts Committee in 1998.
After the Director of Audit's report has been submitted
to the President of the Legislative Council and laid before the council,
it is considered by the Public Accounts Committee. In 2003, the Director
submitted three reports: one on the audit certification of the Government's
accounts for the preceding financial year and two on the results of value-for-money
The Director of Audit's reports on the accounts of
other public bodies are submitted to the relevant authority in accordance
with the legislation governing the operation of these bodies.