Office of the Director of Audit
The Basic Law of the Hong Kong Special Administrative Region of the
People's Republic of China provides that an Audit Commission shall be
established in the HKSAR, and this Commission shall function
independently and be accountable to the Chief Executive of the HKSAR.
This law took effect on July 1, 1997, upon the transfer of sovereignty
from the United Kingdom to China. Accordingly, the former Audit
Department has been renamed as the Audit Commission. The Audit
Commission is one of the oldest departments in Hong Kong. The first
Auditor-General was appointed in 1844.
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 Urban Council, the Regional Council, the
Vocational Training Council, the Hong Kong Housing Authority, the
ex-government hospitals under the Hospital Authority, six 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 for conducting
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
Legislative Council by the chairman of the Public Accounts Committee in
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 1997, 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.