Some time ago, Shenzhen Stock Exchange was concerned that Shandong Sinobioway Biomedicine Co.Ltd(002581) has not hired the 2021 annual audit accountant, and issued a letter of concern. Recently, Shandong Sinobioway Biomedicine Co.Ltd(002581) in the reply letter, explained the reasons: the particularity of the asset inventory of “Jilin unnamed” ginseng, a wholly-owned subsidiary, and the risk factors that the company has been issued with qualified opinion audit reports for four consecutive years have led to that no accounting firm has been invited to cooperate with the company on the annual audit.
According to the announcement, the mountains in Jilin are closed by heavy snow from November to May of the next year, and ginseng usually grows in frozen soil. At this time, it is impossible to observe ginseng seedlings from the surface and dig them from the frozen soil. Therefore, it is impossible to carry out the audit and inventory of ginseng at this stage. In other words, now is not the time window for taking inventory of ginseng assets, and it is difficult for accounting firms to carry out the annual audit of the company.
In recent years, the regulatory authorities have increased the accountability of intermediaries who are not diligent and responsible. If the listed company still has a basic image of integrity, even if it is difficult to take inventory of ginseng assets, the listed company and its relevant personnel can also confirm it through the support of some preliminary materials or appropriate guarantee. Some accounting firms dare to take a certain risk to take inventory of assets on the basis of basic trust. The problem may be that in previous years, accountants issued qualified audit reports on listed companies, which greatly affected the market integrity image of listed companies. Therefore, some accounting firms lack basic trust in listed companies.
Integrity is the cornerstone of the securities market. The breach of faith of the market subject may not only lead to various legal liabilities, but also delisting. According to the delisting rules, if a listed company fails to disclose its annual report or semi annual report within the statutory time limit and fails to disclose it within two months of the company’s stock suspension, it will be subject to delisting risk warning; If the relevant annual report or semi annual report guaranteed by more than half of the directors to be true, accurate and complete is not disclosed within the next two months, the listing will be terminated.
From this point of view, it is extremely important for listed companies and their controlling shareholders to strictly regulate their operation and establish a good faith image of abiding by discipline and law and making promises in the market. For petty gain and dishonesty, they may be abandoned by the market.
Biological assets are relatively special assets of agricultural listed companies. Their survival depends on the natural environment and human care, and the market price also has great volatility. In particular, biological assets may be scattered in the natural environment, which is difficult to observe with the naked eye, and its inventory is a big problem. It is precisely because of the strong subjectivity of the value inventory of biological assets that some agricultural listed companies have manipulated profits and carried out financial fraud through the inventory loss or inventory gain of biological assets.
Accounting firms improve the scientificity and accuracy of biological assets inventory, which is helpful to prevent financial fraud of listed companies. Therefore, the author believes that accountants should understand the industry characteristics of the audited units in advance, pay attention to the purchase and sales contracts of listed companies, and investigate the situation of their upstream and downstream enterprises. We should be willing to invest, make use of some high-tech equipment to improve the inventory quality of biological assets, make the basic work of asset inventory more solid and the data more accurate, and hire relevant authoritative experts and institutions to assist the inventory work when necessary.
Of course, no matter how accountants improve the inventory level of biological assets, they can only be estimated to a considerable extent. Therefore, on the one hand, accountants should adhere to professional ethics; On the other hand, agricultural issuers and listed companies should also pay attention to establishing a good faith image in the market. For the IPO issuance, examination and registration department and regulatory department, at the entrance of IPO, it is necessary to sort out the issuer’s biological asset inventory, pay attention to whether its inventory evaluation method is reasonable, and carefully release those biological assets that rely too much on estimation and are difficult to find out the base.
