Under Section 373 of the Companies Ordinance (Chapter 622) of the Laws of Hong Kong, the director of a company is required to keep accounting records or accounts in accordance with the specifications. Section 51C of the Inland Revenue Ordinance (Chapter 112) also requires every person carrying on a trade, profession or business in Hong Kong to keep adequate records of his income and expense.
However, accounting is not only for the fulfillment of legal responsibilities, but also an indispensable part of the development of the company.
Usage of the accounting accounts :
Financial communication within the company
Financial communication with external stakeholders ( such as banks, creditors, investors )
Since the ultimate responsibility of accounting lies with the directors, it is better for directors to learn some basic accounting knowledge so that they can detect and correct mistakes in the company’s accounts promptly.