“Big Institute” is busy, and “small Institute” comes to help? I’m afraid it’s not so simple for some companies to get married in a hurry.
According to the incomplete statistics of the reporter of Shanghai Securities News, as of February 27, the 2021 audit institutions selected by 12 A-share companies showed the characteristics of significantly smaller scale, and most of these companies were ST companies with more complex situations. In this regard, the exchange repeatedly questioned the “audit ability and letter Phi” and said “whether there is a situation of purchasing audit opinions”.
Ye Jie, director of the Shanghai Institute of accounting, said: “it’s not good to change from a small company to a listed company.”
Some insiders believe that “small Institutes” should adhere to the bottom line of business norms. Previously, some “new institutes” failed to fully evaluate their own practice level and risk-taking ability, exposing quality problems in the follow-up practice process, especially Shenzhen Tangtang accounting firm (hereinafter referred to as “Tangtang Institute”) which has recently been subject to key regulatory penalties.
some companies have attracted attention for hiring “small offices”
According to the reporter’s statistics, the “small offices” recently selected and employed by some A-share companies are Shenzhen xutai Certified Public Accountants (general partnership) (hereinafter referred to as “xutai office”), Pengsheng Certified Public Accountants (special general partnership) (hereinafter referred to as “Pengsheng office”), Hunan Rongxin certified Public Accountants (general partnership) (hereinafter referred to as “Hunan Rongxin”), etc.
Taking xutai accounting firm as an example, the extraordinary general meeting of shareholders held on Huaxun Fangzhou Co.Ltd(000687) 2 / 10 confirmed that xutai accounting firm was appointed as the audit institution in 2021, mainly due to the business development and annual audit task arrangement of Zhongxi accounting firm (special general partnership) (hereinafter referred to as “Zhongxi accounting firm”), the original audit institution, which no longer renewed the appointment.
In contrast, the scale of xutai Institute is much smaller than that of Zhongxi Institute. By the end of 2021, xutai has more than 60 employees, including 17 certified public accountants, and 10 certified public accountants transferred from accounting firms with securities and futures business qualifications. Its business income in 2021 was 128323 million yuan, including 8.1727 million yuan from audit business and 1.47 million yuan from securities business.
At present, Zhongxi Institute has 74 partners, 454 certified public accountants and 286 certified public accountants who have signed the audit report of securities service business. Its operating revenue in 2020 was 309 million yuan, including 270 million yuan from audit business, 106 million yuan from securities business, and 40 Audit customers of listed companies.
More “small” is Hunan Rongxin Hunan Tianrun Digital Entertainment & Cultural Media Co.Ltd(002113) 2 announced on February 16 that Hunan Rongxin will be selected as the audit institution for 2021. The latter was established in June 2020, with 2 partners and 3 certified public accountants at the end of 2021, 2 certified public accountants who have signed the audit report of securities service business and 12 employees. Its total unaudited income in 2021 was 3.37 million yuan, with no securities business income and no audit customers of listed companies.
The above accounting firms were concerned by the exchange and asked whether they have the ability to audit listed companies, while Pengsheng was also asked about the letter phi.
Recently, Tempus Global Business Service Group Holding Ltd(300178) , Bluedon Information Security Technologies Co.Ltd(300297) , Yihua Healthcare Co.Ltd(000150) have successively announced that they want to hire Pengsheng as the audit institution in 2021 in consideration of business development and audit needs. Shenzhen Stock Exchange issued a letter of concern to Bluedon Information Security Technologies Co.Ltd(300297) stating that the audit clients of listed companies of Pengsheng exchange in 2020 were 0, and Tianyan inspection showed that the number of insured persons of Pengsheng exchange was 0 The company shall report the names of relevant personnel of Pengsheng office and the certificates of certified public accountants, explain the reason why the number of insured persons of Pengsheng office is 0, and announce whether the number of partners and the number of certified public accountants are true and accurate.
Bluedon Information Security Technologies Co.Ltd(300297) announced that by the end of 2021, Pengsheng exchange had 70 partners, 344 certified public accountants and 82 certified public accountants who had signed the audit report of securities service business. In 2020, the total business income was 104 million yuan, the audit business income was 766887 million yuan, and the audit customers of listed companies were 0.01 million yuan Bluedon Information Security Technologies Co.Ltd(300297) later, the reply said that according to the reply letter issued by Pengsheng, the above data are true and accurate, and the basic information of Pengsheng has been publicized in the China Institute of certified public accountants and can be consulted.
“small Institute” should also keep the bottom line
Many “small Institutes” accept the appointment of ST company, which highlights the structural changes of the current A-share audit market to a certain extent.
In the view of insiders, although the new securities law will relax the access threshold of audit business of listed companies, the overall market resources are still inclined to head accounting firms.
On March 1, 2020, the new securities law was officially implemented. Accounting firms engaged in securities service business were adjusted from administrative license to post filing management, which means that accounting firms without securities qualification in the past have obtained the opportunity to engage in securities market business fairly.
However, the current companies that employ “small Institutes” have more or less problems. Taking Elefirst Science & Technology Co.Ltd(300356) as an example, Zhonghua Certified Public Accountants (special general partnership) (hereinafter referred to as “Zhonghua office”) issued a qualified opinion on the audit report of the company’s 2020 financial report. Since then, based on the actual situation of the company’s 2021 financial report audit workload and project scheduling, Zhonghua office proposed not to continue to serve as the company’s 2021 audit institution.
On January 24, 2022, Elefirst Science & Technology Co.Ltd(300356) decided to appoint Shenzhen Jiu’An accounting firm (special general partnership) (hereinafter referred to as “Jiu’An firm”) as the audit institution in 2021. By the end of 2021, Jiuan Institute had 6 partners, 19 certified public accountants and 70 employees. In 2021, the total revenue was 102932 million yuan, the audit revenue was 9.4578 million yuan, and there were 49 audit companies.
On January 25, 2022, Elefirst Science & Technology Co.Ltd(300356) announced that it expected a net profit loss of 170 million yuan to 250 million yuan in 2021 and a net profit of – 190 million yuan to – 270 million yuan after deducting non-profit. Up to now, the controlling shareholders have occupied the company’s funds of 200.47 billion yuan. After reasonable estimation, the controlling shareholders have accrued bad debts of about 130 million yuan.
A spokesman for the CSRC previously said that in the case of canceling the access restrictions, it is necessary to strengthen the supervision during and after the event, compact the “gatekeeper” responsibility of accounting firms, urge to improve the audit quality and effectively ensure the quality of financial information disclosure in the capital market.
After undertaking the audit of Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) 2019 annual report, Tangtang office has successively undertaken the audit of 2020 annual report of Jinzhou Cihang Group Co.Ltd(000587) , ST Sitai and other companies. However, the CSRC found that Tangtang office has a serious lack of audit independence in the investigation, and assisted Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) to avoid delisting. In this regard, the CSRC informed on January 7, 2022 that it plans to impose an administrative penalty of “six penalties for no one” on Tangtang according to law, and the suspected crime of relevant subjects will be transferred to the public security organ.
