Lease accounting audit

Who this engagement is for

Finance controllers, CFO offices, and internal audit leads at Hong Kong companies with material property or equipment leases. Typical clients hold between twenty and several hundred leases and report under HKFRS 16 or IFRS 16.

Result you receive

A written lease accounting audit report with findings ranked by financial statement impact, plus a workpaper pack your statutory auditors can read without re-explaining the portfolio. Where adjustments are needed, we provide illustrative journals and a revised disclosure outline.

Scope included

• Walkthrough of your lease identification process and completeness procedures
• Testing of commencement dates, lease terms, extension options, and payment calendars
• Challenge of incremental borrowing rates and any group-wide rate policies
• Recalculation sample of right-of-use assets and lease liabilities
• Review of modifications, reassessments, and short-term / low-value exceptions
• Mapping of findings to statement of financial position, profit or loss, and note disclosures

Scope excluded

• Statutory financial statement audit opinions
• Tax structuring or stamp duty advice
• Negotiation with landlords
• Building or maintaining lease administration software

Provider and approach

Cloudscaleapps auditors with lease accounting focus lead the engagement from our Central office. Fieldwork combines document review, recalculation, and interviews with the people who maintain the lease register.

Process

1. Scoping call — lease count, frameworks, year-end date, known problem contracts.
2. Information request — register extract, sample contracts, rate memos, prior-year notes.
3. Fieldwork — testing, queries, and interim findings discussion.
4. Close-out — draft report, management responses, final pack.

Preparation

Assign a single finance contact. Export the lease register with unique IDs. Gather PDFs for the largest leases by liability and any contracts modified in the period.

Constraints

We schedule around Hong Kong public holidays and your statutory auditor’s timetable. Rush engagements inside four weeks require an agreed reduced sample and written confirmation of that limit.

Fee basis

Fees are quote-based on lease volume, number of modifications, and whether work is primarily on-site. See Fees for indicative ranges. A deposit is invoiced on engagement letter signature.

Next step

Request a scoping call with your approximate lease count and reporting framework.