Central China Securities Co.Ltd(601375)
About Henan Kaiwang Electronic Technology Co., Ltd
Verification opinions on self-evaluation report of internal control in 2021
Central China Securities Co.Ltd(601375) (hereinafter referred to as " Central China Securities Co.Ltd(601375) " or "sponsor") as a sponsor of Henan Kaiwang Electronic Technology Co., Ltd. (hereinafter referred to as "Kaiwang technology" or "company") for IPO and listing on GEM, in accordance with the requirements of relevant laws, regulations and normative documents such as the measures for the administration of securities issuance and listing sponsorship business, Checked the self-evaluation report on internal control of Henan Kaiwang Electronic Technology Co., Ltd. in 2021, and issued the following verification opinions:
1、 Internal control evaluation of the company
(I) evaluation scope of internal control
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. The scope of internal control evaluation covers the main businesses and matters of the company within the scope of consolidated statements. For the key control points of business processing, it is implemented to all links of decision-making, implementation, supervision and management.
According to the requirements of the basic norms of enterprise internal control, the guidelines for the application of enterprise internal control and the guidelines for the evaluation of enterprise internal control, the internal control assessment is conducted on the key elements of internal control at the company level (including control environment, risk assessment, control activities, information and communication and internal supervision).
The main operations and matters included in the scope of evaluation include:
1. Internal control environment
The company's control environment reflects the attitude of the governance and management on the importance of control to the company. The quality of the control environment directly determines whether other controls of the company can be effectively implemented and the implementation effect. The company actively creates a good control environment and strives to provide a broader space for the development of the enterprise, which is mainly reflected in the following aspects: (1) the communication and implementation of integrity and moral values
Integrity and moral values are an important part of the control environment and affect the design and operation of important business processes of the company. The company has always attached importance to the creation and maintenance of this atmosphere, established a series of internal norms such as employee manual, internal control management system and job responsibility statement, and implemented these systems in multiple channels and all directions.
(2) Emphasis on Competence
The management of the company attaches great importance to the setting of the ability level of specific posts and the requirements for the knowledge and ability necessary to achieve this level. According to the needs of actual work, the company carries out various forms of post training and education for different posts, so that employees can be competent for their current jobs.
(3) Participation of governance
The responsibilities of the management have been clearly defined in the articles of association and policies. Through its own activities and with the support of the audit committee, the governance layer supervises the company's accounting policies and internal and external audit work and results. The responsibilities of the governance layer also include supervising and reviewing whether the policies and procedures for the effectiveness of internal control are reasonable and effective.
(4) Management philosophy and business style
The management of the company is responsible for the operation of the enterprise and the formulation, implementation and supervision of business strategy. The board of directors and the audit committee shall effectively supervise them. The management attached great importance to internal control, including information technology control, information management personnel and financial and accounting personnel, and timely and properly handled the relevant internal control reports received. The company adheres to the business philosophy of innovation, knowledge seeking, integrity and unity, and the business purpose of creating opportunities for employees, creating value for customers and creating benefits for the society. It operates honestly and legally.
(5) Organizational structure
In order to effectively plan, coordinate and control business activities, the company has reasonably determined the form and nature of organizational units, implemented the principle of separation of incompatible positions, scientifically divided the responsibilities and authorities within each organizational unit, and formed a mutual check and balance mechanism. The company has designated special personnel to be specifically responsible for internal audit and ensure the implementation of relevant accounting control systems.
(6) Distribution of authority and responsibility
The company adopts the method of assigning control responsibilities to departments and individuals, establishes a set of authorization mechanism for performing specific functions, and ensures that everyone clearly understands the reporting relationship and responsibilities. In order to effectively control the authorized use and supervise the company's activities, the company has established a budget control system, which can adjust the budget in a timely manner according to the changes of the situation. The financial department reasonably ensures that business activities are carried out in accordance with appropriate authorization through various measures; Reasonably ensure that transactions and events can be recorded in appropriate accounts in a timely manner in the appropriate accounting period with the correct amount, so that the preparation of financial statements meets the relevant requirements of accounting standards.
(7) Human resources policy
The company has established and implemented more scientific personnel management systems such as employment, training, job rotation, assessment, reward and punishment, promotion and elimination, and hired enough personnel to complete the assigned tasks.
(8) Enterprise culture construction
Business philosophy: innovation, knowledge seeking, integrity and unity
Corporate mission: create value for employees, shareholders and society by providing high-quality, high value-added products and high-quality services.
The company strengthens the publicity and implementation of corporate culture in its daily work, publicizes the concept of corporate culture to the majority of employees through various publicity channels, integrates the construction of corporate culture into daily business activities, enhances the sense of responsibility of employees and the cohesion of the company, and ensures the healthy and stable operation of the company.
2. Risk assessment process
The company has established an effective risk assessment mechanism, and set up audit committee, audit department and other special institutions to continuously and effectively identify and assess the factors that may lead to risks, such as possible changes in the company's regulatory and business environment, the entry of new employees, the use of new information system or the upgrading of the original system, rapid business development, new technology, new accounting standards and so on, and timely formulate corresponding risk response measures.
3. Information system and communication
The company has established corresponding information systems to provide timely and effective performance reports to the management, including relevant internal and external information. The company has established an information system to promote the modernization of the enterprise. Smooth communication channels and mechanisms enable the management to communicate effectively on employee responsibilities and control responsibilities. Effective communication with customers, suppliers, regulators and other outsiders enables the company's management to take further actions in time in the face of various changes.
4. Control activities
In order to reasonably ensure the realization of various objectives, the company has established relevant control procedures, mainly including transaction authorization control, responsibility division control, voucher and record control, asset contact and record use control, independent audit control, information system control, etc.
(1) Authorization control
The scope, authority, procedures, responsibilities and other relevant contents of authorization and approval are clarified. In daily business activities, managers at all levels within the unit must exercise corresponding functions and powers within the scope of authorization, and the handling personnel must also handle economic business within the scope of authorization.
(2) Responsibility separation control
Reasonably set up division of labor, scientifically divide responsibilities and authorities, implement the principle of separation of incompatible positions, and form a mechanism of mutual checks and balances.
Incompatible positions mainly include: authorization approval and business handling, business handling and accounting records, accounting records and property custody, business handling and business audit, authorization approval and supervision and inspection, etc.
(3) Voucher and record control
The company has established and improved the computerized accounting system and reasonably formulated the voucher circulation procedures. When executing transactions, employees prepare relevant vouchers in time and send them to the financial department for timely accounting, and the vouchers are filed in order. Various transactions must be recorded and compared with the corresponding entries independently.
(4) Asset exposure and record use control
The company restricts the direct contact of unauthorized personnel with property and takes measures such as regular inventory, property records and account verification to ensure the safety and integrity of all kinds of property. The company has established a series of asset custody systems and accounting file custody systems, and equipped with necessary equipment and full-time personnel to ensure the safety and integrity of assets and records.
(5) Independent audit control
The company has specially set up an internal audit institution to audit and supervise the authenticity and accuracy of the company's monetary capital, major procurement, product sales, vouchers and account books and records, the consistency between accounts and facts, important economic contracts, etc., and review and evaluate the soundness, rationality and effectiveness of the company's internal control system.
(6) Information system control
The company has formulated a relatively strict information system control system, and has done relatively perfect work in the development and maintenance of information system, data input and output, document storage and custody, etc.
5. Supervision of control
Supervision is the continuous process of evaluating the effectiveness of the internal control system. Including continuous supervision, independent evaluation, etc. The company has set up an audit department with full-time personnel, and established an internal control evaluation system and internal audit system.
The financial center, audit department and other professional management departments of the company supervise the economic operation quality, economic benefits and internal control system of the company and its subsidiaries, and put forward improvement suggestions and opinions. The internal audit department of the company is directly responsible to the audit committee of the board of directors, audit and supervise the operation and financial situation of the company, and independently exercise the power of audit and supervision. The Audit Department of the company shall implement the internal control defects found in the supervision and inspection in accordance with the audit procedures of the company; Timely put forward management suggestions for the problems found in the supervision and inspection, and urge relevant departments to rectify in time, so as to ensure the effective implementation of the internal control system and ensure the standardized operation of the company.
(II) evaluation basis of internal control work and identification standard of internal control defects
The company organizes and carries out internal control evaluation according to the enterprise internal control standard system and the company's internal control system and evaluation methods. According to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, and in combination with the company's scale, industry characteristics, risk preference, risk tolerance and other factors, the board of directors of the company distinguished the internal control of financial reports from the internal control of non-financial reports, and studied and determined the specific identification standards of internal control defects applicable to the company.
According to the severity of affecting the realization of internal control objectives, the company divides internal control defects into major defects, important defects and general defects:
Major defect: refers to the combination of one or more control defects that may cause the company to seriously deviate from the control objectives. Important defect: refers to the combination of one or more control defects, whose severity is lower than that of major defects, but it may still cause the company to deviate from the control objectives.
General defects: refer to other defects except major defects and important defects.
The identification standards of internal control defects determined by the company are as follows:
1. Evaluation of internal control defects in financial reporting
(1) Qualitative criteria for evaluation of internal control defects in financial reporting:
Identification standard of major defects:
① Make misstatement correction for major errors in the announced financial statements (except for retroactive adjustment of previous years due to changes in policies or other objective factors);
② The material misstatement of the current financial statements found by the certified public accountant and not recognized by the company's internal control over the financial statements;
③ The fraud of the company's directors, supervisors and senior managers, which affects the authenticity of the company's financial statements, and causes significant losses and adverse effects to the company;
④ The supervision of the audit committee and the internal audit department on the internal control of the company's external financial reports is invalid.
Identification criteria for major defects:
① Failure to control the selection and application of accounting policies in accordance with generally accepted accounting standards;
② Failure to effectively control unconventional or complex transactions;
③ Failure to establish anti fraud procedures and control measures;
④ The financial reporting process at the end of the period is not controlled.
General defect identification standard:
In addition to the above major defects and important defects, the defects that affect the authenticity of the financial statements.
(2) Quantitative criteria for evaluation of internal control defects in financial reporting:
Reference index major defect important defect general defect
Ratio of misstatement amount to net assets or ratio 5% ≥ 2.5% ≥ 2.5%
Ratio of total operating income
Note: net assets and total operating income are the audited consolidated statements of the company.
2. Evaluation of internal control defects in non-financial reporting
(1) Qualitative criteria for evaluation of internal control defects in non-financial reports:
Identification standard of major defects:
① Serious violation of national laws and regulations;
② The company's decision-making procedures are not perfect or violate the company's decision-making procedures, resulting in major decision-making mistakes and significant negative impact on the company;
③ The company fails to implement the management of safety production, resulting in safety liability accidents with heavy casualties;
④ Abnormal major changes in senior management or key technical personnel of the company;
⑤ Lack of control or systematic failure of the company's important business;
⑥ Major defects in the company's internal control evaluation have not been rectified;
⑦ Other circumstances that have a significant negative impact on the company as determined by the board of directors of the company.
Identification standard of important defects:
① Unscientific democratic decision-making procedures of the company or violation of decision-making procedures lead to important decision-making mistakes, which has a great negative impact on the company;
② The company's safety production system is imperfect and the safety production management is not in place, resulting in safety liability accidents with heavy casualties;
③ Defects in the company's important business control system or control activities have caused great losses to the company;
④ The important defects of the company's internal control evaluation have not been rectified;
⑤ Other circumstances identified by the board of directors that have a significant negative impact on the company.
General defect identification standard:
Defects other than the above major defects and important defects.
(2) Quantitative criteria for evaluation of internal control defects in non-financial reporting:
Reference index major defect important defect general defect
One or more groups that control defects
The ratio of direct economic loss caused by the combination is more than 3%, the ratio is more than 1.5%, and the ratio is more than 1.5%
Ratio of amount to net assets
Note: net assets are the audited consolidated statements of the company.
(III) identification and rectification of internal control defects
1. Identification and rectification of internal control defects in financial reporting
According to the above identification standards of internal control defects in financial reporting, no major defects and important defects in the company's internal control over financial reporting were found during the reporting period.
2. Identification and rectification of internal control defects in non-financial reporting
According to the above identification standards of internal control defects in non-financial reporting, no major defects and important defects in the company's internal control in non-financial reporting were found during the reporting period.
2、 Evaluation conclusion of the company's internal control
According to the identification of major defects in the company's internal control over financial reports, the company
