Industry News & Expert Tips
Event Planning and Management: Audit Issues, Procedures and Evidence
Industry-specific audit considerations, tailored procedures, and evidence points for Hong Kong audit teams.
Industry Overview
Last updated: 16 September 2026
Event planning and management businesses frequently combine planning, production, on-site coordination, ticketing, sponsorship, venue and equipment arrangements, and third-party supplier management. The resulting mix of event-specific contracts, advance billings and compressed delivery timetables can create material financial-reporting risks, particularly around the nature, timing and measurement of revenue, contract balances and event costs.
A robust audit approach starts with an understanding of the entity's event lifecycle, information systems and controls, then develops responses proportionate to assessed risks in accordance with the relevant HKSA concepts. For entities applying HKFRS, contract analysis should focus on the promised goods and services, transaction price, and when or as performance obligations are satisfied; audit evidence should connect contractual terms, operational delivery and accounting entries rather than rely on invoices alone.
Key Audit Issues
Revenue streams, performance obligations and timing
A single event arrangement may include concept design, project management, event delivery, ticketing administration, equipment or venue arrangements, and post-event services. The audit team should evaluate whether promises in customer contracts are distinct, whether the entity acts as principal or agent for third-party goods or services, and whether revenue is recognised at a point in time or over time as the relevant performance obligation is satisfied.
Advance consideration, contract liabilities and cut-off
Deposits, sponsorship receipts, ticket proceeds and milestone billings may be received well before an event takes place. Risks arise where pre-event cash receipts or invoices are recorded as revenue prematurely, where services straddling year end are not appropriately measured, or where cancellations and postponements require reassessment of recognised amounts and related liabilities.
Variable consideration, amendments and cancellation exposure
Contracts may contain volume rebates, performance incentives, refunds, cancellation charges, scope changes or client-approved variations. The audit team should understand how management identifies and updates these terms, evaluates uncertainty in the transaction price and determines the accounting for contract modifications, including the support for significant judgments and estimates.
Event-specific costs, accruals and onerous commitments
Venue, staging, production, marketing, entertainers, freelancers and logistics costs are commonly incurred close to an event date, sometimes through multiple suppliers. Cut-off, completeness of accruals, classification of client-rechargeable costs and recoverability of prepayments require attention, particularly for cancelled or loss-making events and for costs incurred after the event but relating to services received before year end.
Management override and cash-intensive or third-party channels
The combination of event deadlines, manual journals, discounts, complimentary tickets and sales or collection data from ticketing platforms can increase susceptibility to error or fraud. Consistent with the HKSA fraud-risk and risk-assessment concepts, the audit team should consider revenue-recognition risks, unusual journal entries, related parties, and the completeness and reliability of reports received from ticketing platforms, agents and other third parties.
Tailored Audit Procedures
Map the event lifecycle and walk through representative transactions
Obtain an understanding from contract acceptance through event completion, billing, collection and financial reporting. Walk through selected events using contracts, approved budgets, change orders, operational schedules, invoices, bank receipts and ledger postings to identify relevant systems, hand-offs, controls and points at which revenue, costs and estimates are recorded.
Inspect customer contracts and reassess the revenue model
For a risk-based sample of events and material contract types, inspect executed contracts and amendments. Evaluate the identified performance obligations, stated or implied consideration, refund and cancellation clauses, third-party service arrangements, and management's basis for allocating consideration and recognising revenue under the applicable HKFRS accounting policy.
Test revenue occurrence and cut-off against operational delivery
Select revenue recorded around year end and trace it to evidence of the relevant service transfer, such as signed event completion records, client acceptance or feedback, event schedules, venue attendance documentation, delivery confirmations and post-event reports. Test items before and after year end to identify revenue recognised in an inappropriate period.
Substantiate contract liabilities and reconcile advance receipts
Reconcile deposits, sponsorship receipts, ticket proceeds and milestone billings to customer or platform statements, bank records and the contract-liability roll-forward. Test subsequent event delivery, refunds or cancellations where relevant, and evaluate whether balances outstanding at reporting date remain supported by enforceable obligations and expected delivery.
Test event costs, supplier accruals and prepayments
For selected events, compare the final cost summary with approved budgets, supplier contracts, purchase approvals, invoices, payment records and post-year-end invoices. Perform a search for unrecorded liabilities using payments and supplier invoices after year end, investigate significant budget-to-actual variances, and assess whether event-specific prepayments and accruals are appropriately recognised and disclosed.
Perform targeted analytics and journal-entry testing
Analyse revenue, gross margin, discounts, refunds, deferred revenue and manual journal entries by event, client, service line and period. Follow up unusual margins, late adjustments, round-sum entries, entries posted by unexpected users or entries lacking a clear business rationale, and corroborate explanations with underlying contracts and operational records.
Controls and Evidence to Consider
Approved contract and change-control register
A controlled register should capture the executed contract, scope, pricing, payment terms, performance obligations, cancellation clauses and all approved variations. Evidence may include dated approvals, version-controlled contracts, authorised rate cards and a review record demonstrating that accounting was notified of changes.
Event completion and revenue-recognition review
Operations should provide a standard event completion pack to finance, supported by the run sheet, service-delivery confirmations, venue or attendance evidence, client sign-off where available and any unresolved service issues. A documented finance review should reconcile the pack to the revenue-recognition schedule and identify deferred or variable amounts.
Independent reconciliation of ticketing and cash receipts
For ticketed events, periodic reconciliations should compare ticketing-platform reports, settlement statements, merchant-acquirer or bank records, sales records, refunds and the general ledger. Evidence should include the preparer's reconciliation, independent review, investigation of differences and restricted access to amend ticketing or accounting records.
Event budget, commitment and close-out monitoring
Management should approve an event budget and material supplier commitments before delivery, then compare actual costs and expected margins with the approved budget during and after the event. Retained evidence may include purchase approvals, supplier contracts, budget-to-actual reports, accrual checklists, post-event cost close-out and documented review of significant variances or loss indicators.
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