Audit report of Wengfu (Group) Co., Ltd. for the first three years Tian Zhi Ye Zi [2021] No. 46609
catalogue
1-5 financial statements 6-21 notes to financial statements 22-264
Chongqing Institute of Certified Public Accountants
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Anti counterfeiting identification code: 0211 2281 0830 0131 70 report document No.: tzz [2021] 46609 Customer Name: Wengfu (Group) Co., Ltd. firm name: Tianzhi International Certified Public Accountants (special general partnership) Chongqing branch report type: unqualified opinion on report audit date of report issuance: December 27, 2021 date of report entry: December 28, 2021 signature certified public accountants: Tong Wenguang, Jia Jiquan, Liu Taiping
Note: the information on this page only proves that the report has been reported by Chongqing Institute of certified public accountants and cannot be regarded as any form of guarantee for the authenticity of the report by Chongqing Institute of certified public accountants.
audit report
Tian Zhi Ye Zi [2021] No. 46609 Wengfu (Group) Co., Ltd.:
1、 Audit opinion
We have audited the financial statements of Wengfu (Group) Co., Ltd. (hereinafter referred to as Wengfu), including the consolidated and parent company's balance sheets on September 30, 2021, December 31, 2020, December 31, 2019 and December 31, 2018 (simulated), January September 2021, 2020 and 2019 (simulated) 2018 (simulated) consolidated and parent company income statement, consolidated and parent company cash flow statement, consolidated and parent company statement of changes in owner's equity and notes to relevant financial statements.
In our opinion, the attached financial statements are prepared in accordance with the provisions of "II. Preparation basis of financial statements" in the notes to the financial statements in all material aspects, and fairly reflect the consolidated and parent company's financial position of Wengfu company on September 30, 2021, December 31, 2020, December 31, 2019 and December 31, 2018 (simulated), as well as the financial position of Wengfu company from January to September, 2021 and 2020 The merger of 2019 (simulation) and 2018 (simulation) and the operating results and cash flow of the parent company.
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 Wengfu company 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、 Highlights - preparation basis and restrictions on distribution and use
We remind the users of the financial statements to pay attention to the description of the preparation basis in Note 2 to the financial statements. The financial statements are only used for the purpose of Shanghai Zhongyida Co.Ltd(600610) reporting major asset restructuring to the China Securities Regulatory Commission and are not suitable for other purposes. The contents of this paragraph shall not affect the issued audit opinion.
4、 Key audit matters
Key audit matters are the most important matters that we consider to audit the financial statements in each financial reporting period 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 do not express separate opinions on these matters.
Audit report (Continued)
Tian Zhi Ye Zi [2021] No. 46609
Key audit matters how to deal with them in the audit
Recognition of income
Wengfu company is mainly engaged in phosphorus ore mining and phosphating. For revenue recognition, our main audit procedures are as follows:
Production and sales of industrial products. 1. Understand and evaluate the design of internal control related to product sales revenue, and test whether the design and implementation are effective from January to September 2021, 2020 and 2019;
And 2018 respectively. 2. Check the sales contract, understand the main contract terms or conditions, and evaluate whether the revenue is 23444.2396 million yuan and 20034.7689 million yuan and whether the recognition method is appropriate;
1722.21942 million yuan and 17682.7402 million yuan. 3. Implement analytical review procedures for revenue, including overall gross profit analysis, comparative analysis of gross profit in the same industry as operating revenue is the key performance index of Wengfu company, and gross profit analysis by products and customers, one of the main products, The management of Wengfu company (hereinafter referred to as "unit price analysis of product sales" to identify whether there are major abnormal fluctuations, and find out whether the management of Wengfu company can achieve specific dynamic reasons through inappropriate revenue recognition;
Inherent risks of objectives or expectations. In view of its significant impact on simulated finance 4, understanding the acquisition methods of major customers in the reporting period and conducting background investigation, we determine revenue recognition as the change of major customers in the reporting period for analysis to identify whether there are major different key audit matters. Often, and find out the cause of the abnormality;
For the accounting policies on revenue, see note III. (XXX 5. For domestic sales business, check the relevant information related to revenue recognition by sampling); For the disclosure of income, see note VI (47). Supporting documents, including sales contract, invoice, weighing sheet, confirmation sheet, etc; For export sales business, obtain the E-port Information and check it with the book records, and check the sales contract, export declaration form, freight bill of lading and other supporting documents by sampling;
6. Confirm the sales volume of each period to the main customers in combination with the accounts receivable confirmation procedure;
7. Check the payment collection of important customers after the sales implementation period, and check the authenticity of revenue recognition;
8. Interview important customers and check the authenticity of important customers of Wengfu company in combination with the industrial and commercial information of main customers;
9. Combined with gross profit analysis and contract inspection procedures, check the sales process and analyze whether Wengfu company is the main responsible person or agent in the sales business.
Audit report (Continued)
Tian Zhi Ye Zi [2021] No. 46609
Key audit matters how to deal with them in the audit
Valuation and allocation of fixed assets
For the valuation and allocation of fixed assets on September 30, 2021 and December 2020, our main audit procedures are as follows:
On December 31, 2019 and December 1, 2018, understand and evaluate the design and implementation of internal control related to the cycle of fixed assets, whether the book value of fixed assets of Wengfu company is effective respectively, and test the effectiveness of relevant internal control;
13860884700 yuan and 14167045900 yuan. 2. For the change of fixed assets, check the supporting evidence, evaluate whether the fixed assets transfer time point is 14042602200 yuan and 13412947900 yuan, especially the rationality of the fixed assets transfer time point of construction in progress, and check the proportion of construction contracts and equipment in the total assets on each consolidated asset balance sheet date, including purchase contracts The production records and project progress reports of fixed assets put into use are 35.79%, 36.70%, 36.02% and 35.24%. Information to verify whether the time point of converting construction in progress to fixed assets is appropriate;
Due to its large amount, the time point for the conversion of construction in progress to fixed assets 3. Combined with the on-site survey of construction in progress and fixed assets, check whether there are construction in progress that has been recognized, depreciation and impairment of fixed assets and other accounting estimates that have reached the usable state but have not been carried forward to fixed assets; Whether it is appropriate or not has a significant impact on the financial statements. Therefore, 4. Understand the use of fixed assets and depreciation policies of Wengfu company, and evaluate the rationality of relevant accounting policies. We recognize the valuation and allocation of fixed assets as key accounting policies;
Audit matters. 5. Recalculate the accumulated depreciation of fixed assets and check the accuracy of the accumulated depreciation amount; For the accounting policies of fixed assets, see note III, 6. Review the process of impairment test of Wengfu company. Obtain (XX) fixed assets related to impairment test; The disclosure appraisal report on fixed assets shall evaluate the professional competence of the appraisal institution; See note VI (XVI) for details of appraisal. Review the rationality of relevant parameters, and evaluate whether Wengfu company's provision for impairment of relevant assets is appropriate in combination with the evaluation results.
5、 Responsibilities of management and governance for financial statements
The management is responsible for preparing the financial statements on the basis of note 2 to the financial statements to achieve a fair reflection, and designing, implementing and maintaining necessary internal control so that the financial statements are free from material misstatement due to fraud or error.
When preparing the financial statements, the management is responsible for evaluating the sustainable operation ability of Wengfu company, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless it plans to liquidate, terminate operation or has no other realistic choice. The management is responsible for supervising the financial reporting process of Wengfu company.
6、 Responsibilities of certified public accountants for the audit of financial statements
Our objective is to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement due to fraud or error, and to issue an audit report containing audit opinions. Reasonable assurance is a high level of assurance, but it does not guarantee the implementation of the audit report in accordance with the audit standards (Continued)
The audit of Tian Zhi Ye Zi [2021] No. 46609 bank can always find a major misstatement. 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 performing audit work in accordance with 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. As fraud may involve collusion, forgery, intentional omission, misrepresentation or override of internal control, the risk of failure to detect material misstatement caused by fraud is higher than that caused by failure to detect fraud
