On February 19, Tempus Global Business Service Group Holding Ltd(300178) announced that considering the company’s future business development and audit needs, in order to ensure the smooth progress of the audit work, Pengsheng certified public accountants is proposed to be employed as the company’s audit institution in 2021. Last year, the financial statements of the above companies were audited by Asia Pacific accounting firm with “unable to express an opinion”.
Under the new delisting regulations, the audit opinion issued by audit institutions on the annual reports of listed companies is an important indicator to determine whether the company is delisted or not. Companies that are subject to delisting risk warning (i.e. * st) due to financial delisting indicators will also face delisting risk if the 2021 financial report is issued with an audit report of “qualified opinion, unable to express opinion or negative opinion”.
According to the information and data collected by the reporter of Securities Daily, as of February 20, there were 36 * ST companies that replaced the annual report audit institution of 2021 or had not hired the annual report audit institution, of which 14 had issued audit reports with “unable to express opinions” in the financial reports of 2020.
The experts interviewed believed that when the audit institutions accept the audit business of new listed companies, they need to make preliminary research to judge whether they are competent. Audit institutions that “take orders in the face of danger” should be diligent and responsible, say “no” to customers who try to “buy” audit opinions, and promote enterprises to prepare financial statements in strict accordance with the accounting standards for business enterprises and disclose financial information in compliance and law.
more than 400 listed companies
replace the annual report auditor
According to the information and data collected by the reporter of Securities Daily, as of February 20, a total of 427 listed companies have replaced the audit institutions of the 2021 annual report. Another seven listed companies that did not employ an audit institution received letters of supervision or concern from the exchange or local securities regulatory bureau.
According to the analysis report on the Securities Audit Market in 2020 issued by the CSRC, the number of listed companies that changed the annual report audit institution in 2019 and 2020 was 717 and 398 respectively. According to previous data, the number of listed companies replacing the audit institution of annual report in 2021 is at the middle level.
From the perspective of the reasons for changing the audit institution, there are “the audit human resources of the original audit institution are relatively tight”, “the audit team of the former accounting firm joins the accounting firm to be changed”, “the employment period of the original audit institution expires”, “the operation and business development needs of listed companies”, etc.
“If ‘the audit team of the former accounting firm joins the accounting firm to be changed’ and ‘the employment period of the original audit institution expires’ are true, it is more reasonable for the listed company to change the audit institution.” In an interview with the Securities Daily, Li Xiaohui, a professor of the school of accounting of the Central University of Finance and economics, said that in view of the situation that “the audit human resources of the original audit institution are relatively tight”, it may be because the original audit institution is worried about the high risk of ST company and does not want to participate, or there are disputes between the enterprise and the audit institution on some matters and can not be coordinated.
According to the new securities law, accounting firms engaged in securities service business have changed from examination and approval management to filing management, and the industry access threshold has been reduced. According to the statistics on the website of the CSRC, as of January 31 this year, a total of 84 accounting firms were practicing in the securities audit market, of which 44 were newly registered accounting firms since the implementation of the new securities law.
On February 15, Hunan Tianrun Digital Entertainment & Cultural Media Co.Ltd(002113) announced that Hunan Rongxin certified public accountants was appointed as the company’s annual audit institution in 2021. Hunan Rongxin certified public accountants was just filed with the CSRC in January this year. In addition, according to the reporter’s incomplete statistics, more than 10 audit institutions newly filed this year have begun to undertake the audit of the 2021 annual report, and many of them have undertaken the business of * ST company.
Cui Zhijuan, a professor of Beijing National Institute of accounting, told the Securities Daily that when accepting the audit business of new listed companies, audit institutions must do a good job in the preliminary investigation of listed companies, judge whether they are familiar with the field and whether they can audit with appropriate audit tools or methods, so as to ensure that the risks existing in the audit process can be controlled.
“take orders in the face of danger”
auditors need to be more cautious
According to the reporter’s further combing, among the above 434 listed companies, 14 2020 financial reports were issued with “unable to express opinions” audit reports, and all of them were * ST companies. In addition, seven * ST companies were issued with “qualified opinion” audit reports last year.
In the case of the non-standard audit report issued by the predecessor, the accounting firm “ordered in the face of danger” should be a “gatekeeper” of the capital market and perform the responsibility of checking and checking its financial information.
“Due to the short audit time, the audit institutions that ‘take orders in the face of danger’ are facing greater pressure. At the same time, there is also the risk that the audit opinions will be ‘purchased’.” Li Xiaohui said that if a listed company attempts to “buy” audit opinions by hiring an audit institution, it may transmit the enterprise operation risk and accounting risk to the auditors. After the promulgation of the new securities law, auditors need to bear joint and several liability for compensation. They should be more vigilant and earnestly perform their duties.
Li Xiaohui believes that for customers who try to “buy” audit opinions, audit institutions need to say “no” decisively and can not help the company muddle through the audit opinions. Audit institutions shall assist enterprises to form a standardized accounting system, promote enterprises to prepare financial statements in strict accordance with the accounting standards for business enterprises, and disclose financial information in compliance and legally. “For ST company, which resigned voluntarily from the previous accounting firm, the successor audit institution undertaking its annual report audit business should be more cautious, pay more energy and time, and appropriately increase the audit fee.” Li Xiaohui said.
For investors, experts believe that listed companies with non-standard audit reports should invest carefully.
“As a way of information assurance, the audit report is an important basis for investors to evaluate listed companies.” Cui Zhijuan said that for listed companies with non-standard audit reports, if auditors are unable to express their opinions, it means that the information of listed companies cannot be confirmed by the audit report. Listed companies are likely to be unwilling to disclose some matters to the market and need to pay attention to their potential risks. If the auditor issues an audit report with a negative opinion, it means that the information of the listed company does not meet the requirements, that is, the financial situation and profitability of the listed company are inconsistent with the actual situation, and its operation may be unsatisfactory.
“Unable to express opinions, even certified public accountants can’t find out whether the company’s financial statements are legal and fair. The company’s’ water ‘is too deep.” Zhang Xiaohui said that the negative opinion shows that the financial statements of the enterprise as a whole can not fairly reflect the financial situation and cash flow of the enterprise in the whole year, and investors can not make reasonable decisions and judgments through the company’s financial statements. The qualified opinion indicates that the financial statements of the enterprise generally reflect the financial position and cash flow of the enterprise in the whole year, but the reserved matters may affect the decision-making of investors. The audit report can help investors judge whether the financial statements disclosed by the company are trustworthy.
