audit report
Tian Zhi Ye Zi [2022] No. 5555
catalogue
Audit report 12021 annual financial statement 72021 annual financial statement note 19 Audit Report
Tian Zhi Ye Zi [2022] No. 5555 Rianlon Corporation(300596) all shareholders:
1、 Audit opinion
We have audited the financial statements of Rianlon Corporation(300596) (hereinafter referred to as ” Rianlon Corporation(300596) “), including the consolidated and parent company’s balance sheet as of December 31, 2021, the consolidated and parent company’s income statement, consolidated and parent company’s cash flow statement, consolidated and parent company’s statement of changes in shareholders’ equity and notes to financial statements in 2021.
In our opinion, the attached financial statements are prepared in accordance with the provisions of the accounting standards for business enterprises in all material aspects and fairly reflect the financial position of Rianlon Corporation(300596) the consolidated and parent company as of December 31, 2021 and the operating results and cash flow of the consolidated and parent company in 2021.
2、 Basis for forming audit opinions
We conducted our audit in accordance with the auditing standards for Chinese certified public accountants. The “responsibilities of certified public accountants for the audit of financial statements” in the audit report further expounds our responsibilities under these standards. In accordance with the code of professional ethics for Chinese certified public accountants, we are independent of Rianlon Corporation(300596) , and have fulfilled other responsibilities in terms of professional ethics. We believe that the audit evidence we have obtained is sufficient and appropriate, which provides a basis for our audit opinion.
3、 Key audit matters
The key audit matters are the most important matters that we consider to audit the current financial statements according to our professional judgment. The response to these matters is based on the overall audit of the financial statements and the formation of audit opinions. We will not express separate opinions on these matters.
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Tian Zhi Ye Zi [2022] No. 5555
Key audit matters how to deal with them in the audit
1、 Revenue matters
Rianlon Corporation(300596) the revenue of the current period was 3.445 billion yuan, an increase over the previous period. For the above operating revenue matters, our audit was 38.74%. For domestic sales revenue, Rianlon Corporation(300596) usually includes but is not limited to:
After reaching the delivery place agreed in the order and confirmed by the buyer or dealer (1) the realization of sales revenue is confirmed after the internal goods are executed for the company’s sales and collection business cycle; For the revenue control test of overseas sales, understand and evaluate the company’s revenue in the business cycle, Rianlon Corporation(300596) then confirm the design and implementation of sales revenue control when the goods are declared and exported offshore, identify risks, and realize internal control according to the realization of internal control. As revenue is a key performance indicator, there may be system test results to determine the nature and time of substantive test procedures, the management manipulates revenue recognition and scope in order to achieve specific goals or expectations, and the countermeasures to be taken for special risks; Inherent risks. In addition, the authenticity and completeness of sales revenue (2) for the new important customers during the reporting period, the inspection will have a significant impact on the operating results. Therefore, we regard the corresponding audit procedures in the revenue confirmation system as the key audit matters. To deal, judge its commercial essence in combination with the contract, and focus on the specific income policies and data disclosure. See the corresponding original vouchers of the financial report respectively to prove the occurrence and recognition of income;
As described in note 3, (29) and note 6 (40) of the statement. (3) Interview with the management to understand the sales policies of main products and the changes of sales revenue and sales structure; Implement substantive analysis procedures, focusing on the analysis of sales of products by category, compare the sales structure and gross profit changes of the two periods, and analyze the rationality of the overall gross profit changes during the reporting period;
(4) Select a sample of sales contracts to analyze whether the identification of performance obligations, the allocation of transaction prices and the determination of the time point of control transfer of relevant commodities comply with industry practices and the business model of Rianlon Corporation(300596) , Evaluate whether the accounting policies for revenue recognition comply with the provisions of the accounting standards for business enterprises.
(5) Sample check the supporting documents related to revenue recognition.
(6) Implement letter of confirmation procedures for major customers, including current sales amount, current account balance, etc.
(7) Conduct cut-off test.
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Tian Zhi Ye Zi [2022] No. 5555
Key audit matters how to deal with them in the audit
2、 Goodwill matters
As of December 31, 2021, the book goodwill of the company is RMB 353 million of the audit program package we implemented for the above goodwill matters, including RMB 266216 million of Rianlon Corporation(300596) Kerun, including but not limited to:
Anlong Kaiya was 3268263 million yuan, and no impairment was accrued. (1) Understand and test the importance of goodwill related to the impairment test to the financial statements by the company’s management. At the same time, it is related to the key internal control. Evaluating the results of goodwill impairment test designed by the internal control system largely depends on the rationality of the management and the effectiveness of implementation;
Estimates made and assumptions adopted, such as (2) review the impairment test procedures for the expected future of the asset group, including the estimates of cash flow and discount rate used in the evaluation. The relevance and rationality of the important assumptions of these estimates, the impact of the relevant management of the original data on the future market and the judgment of the economic environment, and the completeness, completeness and accuracy;
The adoption of different estimates and assumptions will have a great impact on the recoverable price of the assessed goodwill. (3) obtaining the measured value of goodwill impairment issued by external evaluation institutions. Therefore, we identify goodwill as a key audit report to evaluate whether the goodwill impairment test model reviews the current accounting events. According to the accounting standards for business enterprises, evaluate whether the independence and professional competence of the external evaluation institution hired by the management are appropriate for the specific data disclosure, see note VI (x) to the financial statements;
7） Described. (4) Review whether the company’s division of the asset group or asset portfolio where the goodwill belongs is reasonable, and whether the book value of goodwill is properly apportioned between asset groups or asset portfolio.
4、 Other information
Rianlon Corporation(300596) Management (hereinafter referred to as “management”) is responsible for other information. Other information includes the information covered in Rianlon Corporation(300596) 2021 annual report, but does not include the financial statements and our audit report.
Our audit opinion on the financial statements does not cover other information, and we will not issue any form of assurance conclusion on other information.
In combination with our audit of the financial statements, our responsibility is to read other information and consider whether other information is materially inconsistent with the financial statements or the information we have learned in the audit process, or there seems to be material misstatement.
Based on the work we have performed, if we determine that there is a material misstatement in other information, we should report that fact. In this regard, we have nothing to report.
5、 Responsibilities of management and governance for financial statements
The management is responsible for preparing the financial statements in accordance with the provisions of the accounting standards for business enterprises to achieve a fair reflection, and designing, implementing and maintaining necessary internal control so that the financial statements are free from material misstatement caused by fraud or error.
When preparing the financial statements, the management is responsible for assessing the going concern ability of Rianlon Corporation(300596) and disclosing the matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Rianlon Corporation(300596) , terminate the operation or have no other realistic options.
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The management layer of Tian Ye Zi [2022] No. 5555 is responsible for supervising the financial reporting process of Rianlon Corporation(300596) .
6、 Responsibilities of certified public accountants for the audit of financial statements
Our goal is to obtain reasonable assurance on whether the financial statements as a whole are free from material misstatement due to fraud or error, and issue an audit report containing audit opinions. Reasonable assurance is a high-level assurance, but it does not guarantee that the audit performed in accordance with the audit standards will always be found when a major misstatement exists. Misstatement may be caused by fraud or error. If it is reasonably expected that the misstatement alone or in summary may affect the economic decisions made by the users of the financial statements based on the financial statements, the misstatement is generally considered to be significant.
In the process of carrying out the audit work in accordance with the audit standards, we use professional judgment and maintain professional doubt. At the same time, we also carry out the following work:
(1) Identify and assess the risks of material misstatement of financial statements due to fraud or error, design and implement audit procedures to deal with these risks, and obtain sufficient and appropriate audit evidence as the basis for issuing audit opinions. Since fraud may involve collusion, forgery, intentional omission, misrepresentation or override of internal control, the risk of failing to find major misstatement caused by fraud is higher than that caused by error.
(2) Understand the internal control related to audit to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies selected by the management and the rationality of accounting estimates and related disclosures.
(4) Draw conclusions on the appropriateness of management’s use of going concern assumptions. At the same time, according to the audit evidence obtained, draw a conclusion on whether there are major uncertainties in the matters or circumstances that may lead to major doubts about Rianlon Corporation(300596) going concern ability. If we conclude that there is significant uncertainty, the auditing standards require us to draw the attention of statement users to the relevant disclosures in the financial statements in the audit report; If the disclosure is insufficient, we should express a non unqualified opinion. Our conclusions are based on the information available as of the date of the audit report. However, future events or circumstances may cause Rianlon Corporation(300596) unable to continue its business.
(5) Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
(6) Obtain sufficient and appropriate audit evidence on the financial information of entities or business activities in Rianlon Corporation(300596) to express an audit opinion on the financial statements. We are responsible for guiding, supervising and implementing the group audit, and take full responsibility for the audit opinions.
We communicated with the management on the planned audit scope, schedule and major audit findings, including the internal control defects that we identified in the audit.
We also provide a statement to the management that we have complied with the professional ethics requirements related to independence, and communicate with the management all relationships and other matters that may reasonably be considered to affect our independence, as well as relevant preventive measures (if applicable).
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