If the annual report cannot be released on time, investors may abandon the listed company.
At the risk of “dystocia” in the annual report, why should listed companies change the audit?
Institutional data show that since the beginning of 2022, more than 50 A-share listed companies have disclosed the announcement of changed or proposed to change accounting firms.
Among them, some listed companies intend to replace the company’s 2022 audit institution, but some listed companies want to replace the company’s 2021 audit institution.
The disclosure of the annual report is imminent, and the “imminent” replacement of audit institutions by listed companies has also attracted the attention of regulators.
Insiders said that changing the audit institution on the eve of the disclosure of the annual report is often easy to cause dystocia of the annual report; In addition, if the annual report cannot be released on time, it will also have an impact on the reputation and even business development of the enterprise.
annual report is about to be disclosed, and Winsan(Chengdu) Medical Science And Technology Company Limited(600767) and other listed companies have changed their audit institutions
On April 1, Moon Environment Technology Co.Ltd(000811) issued the announcement of the proposed change of accounting firm.
Moon Environment Technology Co.Ltd(000811) the reason for changing the accounting firm is: considering the company’s development strategy, future business expansion and audit needs, the company plans to appoint Shanghui accounting firm (special general partnership) as the company’s audit institution in 2022 to be responsible for the company’s financial audit in 2022. The company has communicated with the previous and subsequent accounting firms on matters related to the change of accounting firm, and the previous and subsequent accounting firms have clearly known the change and confirmed that they have no objection.
According to the announcement, Moon Environment Technology Co.Ltd(000811) 2022 annual financial statement audit fee and internal control audit fee total 850000 yuan (including tax), including Shanghai Pudong Development Bank Co.Ltd(600000) yuan for financial report audit and 250000 yuan for internal control audit.
According to the data of China stock market news choice, since the beginning of 2022, more than 50 A-share listed companies have disclosed the announcement of changes or plans to change accounting firms.
Some listed companies, like Moon Environment Technology Co.Ltd(000811) , intend to replace the company’s 2022 audit institution, but some listed companies want to replace the company’s 2021 audit institution.
For example Elefirst Science & Technology Co.Ltd(300356) .
In early January this year, Elefirst Science & Technology Co.Ltd(300356) issued an announcement on replacing the audit institution in 2021.
As for the reasons for the change, Elefirst Science & Technology Co.Ltd(300356) explained: Based on the actual situation of the company’s 2021 financial report audit workload and project scheduling, Zhonghua firm proposed not to continue to serve as the company’s 2021 audit institution. The board of directors of the company agreed to change Jiu’An firm as the audit institution in 2021.
Now, the disclosure of the annual report is imminent, and some listed companies “face the battle” to change the audit.
In late March this year, Winsan(Chengdu) Medical Science And Technology Company Limited(600767) issued an announcement on changing the accounting firm.
Winsan(Chengdu) Medical Science And Technology Company Limited(600767) said that due to the project and the impact of the epidemic, the schedule of Rongcheng accounting firm could not meet the disclosure time requirements of the company’s 2021 annual report and could not complete the audit of the company’s 2021 annual financial report and internal control audit report. After full communication and consultation, it is proposed to terminate the audit service in 2021.
\u3000\u3000 “In order not to affect the audit and disclosure requirements of the annual report and comprehensively consider the needs of the company’s business development, the company plans to hire xingchanghua certified public accountants as the company’s financial audit institution and internal control audit institution in 2021 for one year. The company has communicated with Rongcheng certified public accountants and xingchanghua certified public accountants in advance about the change of the accounting firm. All parties are aware of the matter and have no objection.” Winsan(Chengdu) Medical Science And Technology Company Limited(600767) scale.
Furen Group Pharmaceutical Co.Ltd(600781) and other “on the spot” to change the audit, and the exchange “rushed” to send a letter for inquiry
.
Regulators obviously also noticed this matter and “promptly” issued a letter of concern or inquiry.
Among them, Shenzhen Danbond Technology Co.Ltd(002618) belongs to the change of 2021 annual audit accountant twice in a short time. In the face of the letter of concern from Shenzhen Stock Exchange, Shenzhen Danbond Technology Co.Ltd(002618) replied: the labor cost and time cycle required by Shenzhen xutai Certified Public Accountants (general partnership) (hereinafter referred to as “xutai firm”) to carry out audit business have increased, and the personnel of the project team originally planned to be responsible for the company’s 2021 annual audit have resigned, Xutai firm is unable to send sufficient and professional personnel to take charge of the company’s annual audit, fully ensure the implementation of the audit, and complete the preparation and audit of the annual report on schedule. In order to ensure the smooth progress of the audit work, after comprehensive consideration, the company and xutai firm agreed through consultation that the company plans to hire Shenzhen Guangshen Certified Public Accountants (general partnership) as the company’s audit institution in 2021.
The reporter of shell finance noted that the scheduled disclosure date of Shenzhen Danbond Technology Co.Ltd(002618) 2021 annual report is April 26, 2022. At present, the stock trading of Shenzhen Danbond Technology Co.Ltd(002618) has been subject to delisting risk warning and other risk warnings. At the same time, Shenzhen Danbond Technology Co.Ltd(002618) has the risk of being terminated from listing.
Around Furen Group Pharmaceutical Co.Ltd(600781) there are more risks, such as the risk of sustainable operation ability, the risk of capital occupation and illegal guarantee, the risk of controlling shareholder equity freeze, etc.
In the reply of Furen Group Pharmaceutical Co.Ltd(600781) to the inquiry letter of Shanghai Stock Exchange, the reporter of shell finance learned that Beijing Xinghua submitted the letter on canceling the audit business of 2021 annual report to Furen Group Pharmaceutical Co.Ltd(600781) on November 30, 2021. As of the date of cancellation, Beijing Xinghua had not carried out work on the audit matters of 2021 and Furen Group Pharmaceutical Co.Ltd(600781) had not communicated with Beijing Xinghua on the audit matters of 2021.
Furen Group Pharmaceutical Co.Ltd(600781) and Beijing Xinghua have no major differences on audit fees, audit opinions and audit work arrangements; The specific reason why Beijing Xinghua no longer serves as the Furen Group Pharmaceutical Co.Ltd(600781) 2021 annual review organization is that Beijing Xinghua cannot continue to undertake the work arrangement.
what are the risks of changing the audit of listed companies
As we all know, it is less than a month since the deadline for the disclosure of the 2021 annual report, but some listed companies chose to replace the company’s 2021 audit institution at the end of March. The reasons behind this operation are worth investigating, and the risks behind it are also worth paying attention to.
Ding Jihua, an expert of the national enterprise compliance committee of the China Council for the promotion of international trade, told the shell finance reporter that the disclosure of the annual report is imminent. There may be three reasons for the listed companies to change the audit: first, the listed companies themselves have financial compliance problems, such as performance fraud. At this time, the audit intermediaries served found that the intermediaries issuing the audit report are unwilling to sign the standard unqualified opinion report, Forcing listed companies to replace new audit intermediaries; Second, the compliance problems of listed companies have always existed, and the long-term service audit institutions have fully understood these problems of the company.
These companies hope to change the audit institution and let the new audit institution issue the audit report in a short time. Because the new audit institution has a short time to enter, it can not fully and deeply understand the company’s problems, so as to issue the audit report under the pressure of a short time; Third, long-term service audit institutions have recently had compliance problems, such as being punished by regulators. In order not to affect their reputation, listed companies also choose to replace new audit service intermediaries.
Wang Yaowu, a financial expert, said: “usually, the annual report of listed companies needs to be announced before April 30. If the audit institution is changed on the eve of the announcement day, it is often easy to cause dystocia of the annual report.”
\u3000\u3000 “If a listed company cannot find a new audit institution in a short time, it will not be able to publish its annual report on time, which will not only attract the attention of regulators, but also investors may abandon the listed company. In addition, business partners and banks may pay attention to the negative news of the listed company, which will have a very negative impact on the reputation of the listed company and the operation and development of the enterprise The impact of. ” Ding Jihua said.
