History of the Audit Commission

Hong Kong has been part of China since ancient times. It was occupied by Britain after the Opium War in 1840. The necessity for an audit presence was recognised in the very early days of Hong Kong. The Audit Commission (known as Audit Department before 1 July 1997) is one of the oldest government departments in Hong Kong. The first Director of Audit was appointed in 1844. The current incumbent, Prof. LAM Chi Yuen Nelson, JP, took up the post as the 25th Director of Audit in July 2022. The duties and powers of the Director of Audit are stipulated in the Audit Ordinance (Cap. 122) which was enacted in December 1971. On 1 July 1997, pursuant to the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China, the Audit Commission was established and the Director of Audit became one of the principal officials of the Hong Kong Special Administrative Region (HKSAR).

Enactment of the Audit Ordinance

A key milestone in the development of public auditing in Hong Kong was the enactment of the Audit Ordinance in December 1971. The Audit Ordinance provides for the appointment, tenure of office, duties and powers of the Director of Audit and for the auditing of and reporting on the public accounts. Under the Ordinance, the Director of Audit is the auditor of the accounts of the Government. He has wide powers of access to the records of departments and he can require any public officer to give an explanation and to furnish such information as he thinks fit to enable him to discharge his duties. In the performance of his duties and the exercise of his powers under the Ordinance, the Director of Audit is not subject to the direction or control of any other person or authority.

Establishment of the Public Accounts Committee

In 1978, the Public Accounts Committee (PAC) was established as a standing committee of the Legislative Council (LegCo) to consider the reports of the Director of Audit on the accounts of the Government, on such other accounts required to be laid before LegCo and on any matter incidental to the performance of the Director of Audit's duties as the PAC may think fit. The establishment of the PAC was an important milestone in the development of public accountability in Hong Kong.

The Value for Money Audit Guidelines

With the expansion of the scope of government audit in Hong Kong to cover value for money (VFM) issues of managing public funds, a set of VFM Audit Guidelines was agreed in 1986 between the PAC and the Director of Audit and accepted by the Government. This set of guidelines was tabled in LegCo by the Chairman of the PAC in November 1986. The promulgation of the VFM Audit Guidelines set another important milestone in the development of public accountability in Hong Kong.

The Basic Law and the establishment of the Audit Commission

On 1 July 1997, Hong Kong has become a special administrative region of the People's Republic of China. According to Article 58 of the Basic Law, a Commission of Audit shall be established in the HKSAR, which shall function independently and be accountable to the Chief Executive. Consequently, the former Audit Department was renamed the Audit Commission with effect from 1 July 1997. The post title of the Director of Audit in Chinese was also changed from “核數署署長” to “審計署署長” with effect from the same date.

The new Value for Money Audit Guidelines

In 1998, a revised set of VFM Audit Guidelines was tabled in the Provisional Legislative Council by the Chairman of the PAC. This new set of guidelines was agreed between the PAC and the Director of Audit and accepted by the Government of the HKSAR.

Directors of Audit since 1 July 1997 and to date are as follows:

1	CHAN Yin-tat, Dominic, SBS	1997 - 2003
2	TANG Kwok-bun, Benjamin, GBS	2003 - 2012
3	SUN Tak-kei, David, GBS, JP	2012 - 2018
4	CHU Nai-cheung, John, GBS, JP	2018 - 2022
5	Prof. LAM Chi Yuen Nelson, JP	2022 - present