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Falcon CPA's mission is to provide a "management, business and accounting support solution" for clients doing business in Hong Kong, China and Malaysia. Our services include, but not limited to, the following:

Internal Controls and Audit Services

A system of internal control consists of policies and procedures designed to provide management with reasonable assurance that the organization achieves its objectives and goals. These policies and procedures are often called controls, and collectively they comprise an organization’s internal control. Traditionally referred to as 'hard controls', these include segregation of duties, limiting access to cash, management review and approval, and reconciliations. Other types of internal controls include 'soft controls' such as management 'tone at the top', performance evaluations, training programs, and maintaining established policies, procedures, and standards of conduct.

The auditing profession has widely accepted the Committee of Sponsoring Organizations of the Treadway Commission’s report titled The Internal Control – Integrated Framework (COSO Report) as a general definition of internal control.  The COSO Report defines internal control as a process, affected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following three categories:

  • Effectiveness and efficiency of operations

  • Reliability of financial reporting

  • Compliance with applicable laws and regulations


Internal control consists of five interrelated components:

  1. Control Environment.  The organization’s tone; the foundation for all other components of internal control.
  1. Risk Assessment.  Management establishes activity-level objectives and mechanisms for identifying and analyzing risk related to their achievement.
  1. Control Activities.  Policies and procedures that ensure management’s directives are carried out and help ensure that necessary actions are taken to minimize risks to achievement of the entity’s objectives.
  1. Information and Communication.  Information must be identified, captured, and communicated in a form and time frame that enable people to carry out their responsibilities.
  1. Monitoring.  Assessing the quality of the system’s performance over time.  This is accomplished through ongoing monitoring activities, separate evaluations or a combination of the two.

Effective internal control helps an organization achieve its operations, financial reporting, and compliance objectives.
Effective internal control is a built-in part of the management process (i.e., plan, organize, direct, and control). Internal control keeps an organization on course toward its objectives and the achievement of its mission, and minimizes surprises along the way.  Internal control promotes effectiveness and efficiency of operations, reduces the risk of asset loss, and helps to ensure the reliability of financial reporting and compliance with laws and regulations.


Roles and Responsibilities of Internal Control
State entity heads are accountable for activities carried our in their agencies.  This means that management is responsible for identifying the risks that could prevent them from achieving their objectives, and making sure that appropriate internal controls (policies and procedures) are in place to mitigate those risks.  Management is also responsible for ongoing monitoring of internal controls to make sure that controls are still working and whether risks have changed requiring new controls


Management need to understand that:

  1. Internal control is a process.
    It’s a means to an end, not an end in itself.

  2. Internal control is affected by people at every level of the Department.
    While state agency heads are accountable for activities carried out in their organizations, internal control is, to some degree, everyone's responsibility.
  3. Internal control can provide only reasonable assurance -- not absolute assurance -- regarding the achievement of the organisation’s objectives.
    Effective internal control helps an organization achieve its objectives; it does not ensure success. There are several reasons why internal control cannot provide absolute assurance that objectives will be achieved: cost/benefit realities, collusion among employees, and external events beyond a department’s control.


Faclcon CPA Ltd is managed by our Director, Mr. Gilbert Loke who is a member of The Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. In view of that, we have a duty and responsibility to adhere to those professional bodies rules and regulation not to disclose any customer's information to any one without the customer's prior consent, except if the customer is suspected for money laundry or criminal offence, or the HK Inland Revenue Department suspects that he/she has evaded HK taxes (not taxes in other countries). Further the HK Inland Revenue Department is not allowed by the HK law to disclose any information to any one.





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