Dareway Software Co.Ltd(688579)
audit report
Dhsz [2022] 003925
Dahua Certified Public Accountants (special general partnership)
DaHuaCertifiedPublicAccountants（SpecialGeneralPartnership）
Beijing Institute of Certified Public Accountants
Business report unified coding reporting system
Unified business reporting code: 110101482022717009657
Report name: Dareway Software Co.Ltd(688579)
Report No.: dhsz [2022] 003925
Name of audited (inspected) unit: Dareway Software Co.Ltd(688579)
Name of accounting firm: Dahua Certified Public Accountants (special general partnership)
Business type: financial statement audit
Report opinion type: unqualified opinion
Report date: April 12, 2022
Filing date: April 11, 2022
Zhang eryong (110 Ning Xia Yin Xing Energy Co.Ltd(000862) 680),
Signed by:
Wang Wei (110101480033)
(you can enter the information by scanning the official website of Beijing Zhuxie)
Note: this filing information only proves that the report has been filed with the Beijing Institute of certified public accountants, and does not mean that the Beijing Institute of Certified Public Accountants makes any form of guarantee for the content of the report in any sense.
Dareway Software Co.Ltd(688579)
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Contents page I. audit report 1-2 II. Audited financial statements
Consolidated balance sheet 1-2 consolidated income statement 3 consolidated cash flow statement 4 consolidated statement of changes in shareholders' equity 5-6 parent company balance sheet 7-8 parent company income statement 9 parent company cash flow statement 10 statement of changes in shareholders' equity of the parent company 11-12 notes to financial statements 1-87
Dahua Certified Public Accountants (special general partnership) 12 / F, building 7, No. 16 courtyard, Middle West Fourth Ring Road, Haidian District, Beijing [100039] Tel: 86 (10) 58350011 Fax: 86 (10) 58350006 www.dahua-cpa com. Audit report
Dahuashen Zi [2022] No. 003925 Dareway Software Co.Ltd(688579) all shareholders:
1、 Audit opinion
We have audited the financial statements of Dareway Software Co.Ltd(688579) (hereinafter referred to as Dareway Software Co.Ltd(688579) ), 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 relevant 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 the consolidated and parent company as of December 31, 2021, and the operating results and cash flows 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 Dareway Software Co.Ltd(688579) , 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.
We confirm that the following matters are the key audit matters that need to be communicated in the audit report. 1. Revenue recognition
2. Provision for bad debts of accounts receivable and contract assets
（1） Revenue recognition
1. Event description
Please refer to note IV, (XXIX) and note VI and note 31 of the financial statements for Dareway Software Co.Ltd(688579) revenue recognition policy and revenue amount information during the reporting period.
The amount of Dareway Software Co.Ltd(688579) operating income in 2021 is 63750988044 yuan. Among them, the income from software development business is 34284384070 yuan. For software development business that meets the obligations performed within a certain period of time, when the results of such labor transaction can be reliably estimated, the income shall be recognized according to the performance progress, and the performance progress shall be determined according to the proportion of accumulated actual labor costs in the total estimated cost. When applying the percentage of completion method, it involves the estimation of the estimated total contract cost and completion progress, as well as the estimation of the estimated contract loss, which often requires significant professional judgment.
Since operating revenue is one of the key financial indicators of Dareway Software Co.Ltd(688579) and there is inherent risk that the management adjusts revenue recognition in order to achieve specific goals or expectations, and the application of the percentage of completion method involves significant management judgment and estimation, we regard revenue recognition as a key audit matter in Dareway Software Co.Ltd(688579) reporting period.
2. Audit response
For the recognition of Dareway Software Co.Ltd(688579) operating revenue and the application of the percentage of completion method related to the recognition of software development revenue, the audit procedures we performed mainly include:
1) Understand and evaluate the rationality of the design of internal control system related to the recognition of operating revenue, including the design and implementation of internal control over the estimated total cost of software development projects, and test the effectiveness of the implementation of key controls;
2) Through sampling inspection of business contracts and interviews with the management, identify the contract terms related to the transfer of control, and then evaluate whether the accounting policies for Dareway Software Co.Ltd(688579) revenue recognition comply with the relevant provisions of the accounting standards for business enterprises;
3) According to the product and software development business contracts and categories, customers, companies in the same industry and other dimensions, implement analytical procedures, including gross profit margin anomaly analysis, comparative analysis of project actual cost and budget cost, comparative analysis of project completion progress and collection progress, and evaluate the rationality of changes in operating income and gross profit margin;
4) Carry out detail test, and sample and check business contracts, delivery records, sales invoices, logistics documents, test acceptance documents, acceptance reports and other supporting documents for revenue recognition under different business modes; Among them, for the software development business, through consulting the contract, interviewing with the person in charge of the software development project or the project manager, and conducting sampling inspection, understand and evaluate the method and rationality of the estimated total project cost, check the authenticity and integrity of the accumulated labor cost incurred, and check the correctness of the calculation of the completion schedule. It mainly includes:
A. Compare and analyze the actual total cost of the completed project with the total project contract cost estimated by the management, and evaluate the experience and ability of the management to estimate the total project cost;
B. Check the constituent items of the estimated total cost to the project contract, outsourcing contract, project man hour calculation table and other supporting documents to identify whether there are omissions and deviations in the estimated total cost; C. Check the invoice, collection, project progress confirmation and other supporting materials of relevant projects to understand the rationality of the completion progress;
D. Check the actual costs recognized before and after the balance sheet date to the supporting documents such as the project man hour table and progress confirmation sheet, so as to evaluate whether the actual costs are recognized in an appropriate period; E. Compare the accumulated costs incurred by the end of the period with the estimated total costs, check the large costs recorded after the balance sheet date, and evaluate the rationality and completeness of the estimated total costs of the contract;
5) Implement the letter procedure to confirm the amount of income and the balance of current accounts to major customers; Or obtain the software development project progress confirmation form to confirm the progress of relevant projects and the completion degree of projects at the end of the period.
6) According to different sales models, check the supporting documents of revenue recognition for the sales revenue recognized before and after the balance sheet date to assess whether the sales revenue is recognized in an appropriate period; 7) Focus on the verification of the application of the percentage of completion method in software development business;
8) Assess whether the management's financial statement disclosure of income is appropriate.
Based on the audit work performed, we believe that the management's judgment on the accounting treatment of revenue recognition can be supported by the evidence we have obtained.
（2） Provision for bad debts of accounts receivable and contract assets
1. Event description
Please refer to note IV, (x), (XIV) and note VI, note 3 and note 7 of the financial statements for the accounting policy of withdrawing bad debt reserves of Dareway Software Co.Ltd(688579) accounts receivable and contract assets and the carrying amount of accounts receivable and contract assets during the reporting period. As of December 31, 2021, the book balance of Dareway Software Co.Ltd(688579) accounts receivable and contract assets were 18059535605 yuan and 15947003626 yuan respectively, and the bad debt reserves were 2009787359 yuan and 1439127385 yuan respectively. Because the determination of the amount of bad debt reserves of accounts receivable and contract assets involves the judgment and estimation of the management, and the accounts receivable and contract assets are important to the financial statements, Therefore, we believe that the provision for bad debts of accounts receivable and contract assets is a key audit matter.
2. Audit response
In the process of auditing the bad debt reserves of accounts receivable and contract assets, the audit procedures we implemented mainly include:
1) Evaluated and tested the design and operation effectiveness of Dareway Software Co.Ltd(688579) customer credit policy and internal control related to accounts receivable and contract asset management;
2) Analyze the rationality of accounting policies for bad debt reserves of accounts receivable and contract assets, including the basis for determining the combination of accounts receivable and contract assets, the judgment of separate provision for bad debt reserves, etc; 3) For accounts receivable and contract assets with separate provision for bad debts, select samples to obtain the basis for the management's estimation of the expected future recoverable amount, and evaluate the rationality of the management's provision for impairment in combination with the customer's operation, credit status and payment collection;
4) For accounts receivable and contract assets with bad debt withdrawn according to the combination of credit risk characteristics, obtain the bad debt provision withdrawal table, review whether the aging division of accounts receivable and contract assets of the management is correct, and check whether the withdrawal proportion is implemented in accordance with the bad debt policy; Review whether the amount of bad debt provision is accurate;
5) Check the approval records related to the write off of accounts receivable and contract assets, check whether the write off basis complies with relevant regulations and whether the accounting treatment is correct;
6) By analyzing the aging of Dareway Software Co.Ltd(688579) accounts receivable and contract assets and customer reputation, and implementing the confirmation procedures of accounts receivable and contract assets and the collection after the inspection period, evaluate the rationality of the management's provision for bad debt reserves;
7) Assess whether the management's financial statement disclosure of accounts receivable and contract assets is appropriate. Based on the audit work performed, we believe that the management's judgment on the recoverability of accounts receivable and contract assets and the estimation of bad debt reserves are reasonable.
4、 Other information
Dareway Software Co.Ltd(688579) management is responsible for other information. Other information includes the information covered in the 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 understand 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、 Management and Governance on Finance
