Audit report
YZSZ (2022) No. 110011 Gansu Engineering Consulting Group Co.Ltd(000779) all shareholders:
1、 Audit opinion
We have audited the consolidated and parent company's financial statements of Gansu Engineering Consulting Group Co.Ltd(000779) (hereinafter referred to as " Gansu Engineering Consulting Group Co.Ltd(000779) group"), including the consolidated balance sheet and parent company's balance sheet as of December 31, 2021, the consolidated income statement and parent company's income statement, consolidated cash flow statement and parent company's cash flow statement, consolidated statement of changes in shareholders' equity and parent company's statement of changes in shareholders' equity and notes to relevant 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 consolidated and parent company's financial position of Gansu Engineering Consulting Group Co.Ltd(000779) group as of December 31, 2021 and the consolidated and parent company's operating results and cash flow 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 consolidated 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 Gansu Engineering Consulting Group Co.Ltd(000779) group 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.
Key audit matters audit response
1. Revenue recognition we mainly implement the following procedures for revenue recognition:
(1) Understand and evaluate the effectiveness of the design and operation of key internal controls related to revenue recognition, and test the effectiveness of the implementation of key controls;
(2) Through the interview with the management, understand and evaluate the rationality of the management's method of determining the completion schedule, and evaluate whether the revenue recognition policy is appropriate. As described in note V and 40 operating revenue of the financial statements, Gansu Engineering Consulting Group Co.Ltd(000779) group has always implemented it;
In 2021, the consolidated main business income was 258203969064 yuan, (3) analytical procedures were implemented for the income to judge that the operating income and gross amount were significant. As revenue is a measure of the key performance of Gansu Engineering Consulting Group Co.Ltd(000779) group, it refers to the rationality of interest rate changes. Including: the analysis of income and gross profit margin, one of the targets, and according to the contract terms and business arrangements, the analytical procedures such as the comparison and analysis of the current period's income and gross profit margin with the previous period; (5) select samples to check the project business contracts, project delivery and obligations, which involve the judgment of the management. There is a risk that the management will advance or postpone the recognition of revenue in order to achieve the specific target acceptance and other external evidence to determine the rationality and authenticity or expectation of the completion progress. Therefore, we will accept;
Entry confirmation is identified as key audit matters. (6) Select important items, confirm the amount of revenue recognition by letter, and perform alternative test for those who do not reply to the letter to confirm the authenticity and integrity of relevant revenue recognition;
(7) Implement cut-off test procedures to check whether there is cross period recognition of income;
(8) Check the appropriateness of the presentation of operating income information in the financial statements.
2. Provision for impairment of accounts receivable our provision for impairment of accounts receivable mainly implements the following procedures: (1) understand and evaluate whether the design and operation of the management's key internal control related to the provision for impairment of accounts receivable are effective, And test the effectiveness of key control implementation;
(2) Understand the judgment and considerations of the management when evaluating the provision for impairment of accounts receivable, and analyze the rationality of the management's accounting estimation of the provision for impairment of accounts receivable;
As stated in notes V and 3 to the financial statements, Gansu Engineering Consulting Group Co.Ltd(000779) group's accounts receivable at the end of the period (3) reviewed the book balance of accounts receivable for which bad debt provision had been withdrawn in previous years, the subsequent actual write off or reversal of bad debt provision, and evaluated the accuracy of management's previous forecast of 23066588486 yuan and net book value of 102677406586; Yuan, with a significant amount.
As the collectability of accounts receivable involves the management's operation (4) accounts receivable that measure the expected credit loss on a single basis. With significant estimation and judgment, the provision for impairment of accounts receivable is important for the finance to obtain and check the management's estimation, evaluate the rationality of key assumptions and financial statements, so we take the provision for impairment of accounts receivable as the accuracy of the relevant data and check it with the obtained external information;
Key audit matters. (5) Measure the accounts receivable with expected credit loss on the basis of portfolio, and evaluate the rationality of the management's division of portfolio according to the characteristics of credit risk; Evaluate the rationality of the comparison table between the aging of accounts receivable and the expected credit loss rate determined by the management based on historical credit loss experience and forward-looking estimation; Test the accuracy of the data used by the management (including the aging of accounts receivable) and whether the calculation of bad debt reserves is accurate; (6) Check whether the information related to the impairment of accounts receivable has been recorded in the financial statements
Proper presentation of financial statements.
4、 Other information
Gansu Engineering Consulting Group Co.Ltd(000779) group management (hereinafter referred to as management) is responsible for other information. Other information includes the information covered in the 2021 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 have learned 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、 Responsibilities of management and governance for financial statements
The management is responsible for preparing the financial statements in accordance with the provisions of the accounting standards for business enterprises to achieve a fair reflection, and designing, implementing and maintaining necessary internal control so that the financial statements are free from material misstatement caused by fraud or error.
When preparing the financial statements, the management is responsible for evaluating the going concern ability of Gansu Engineering Consulting Group Co.Ltd(000779) group, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Gansu Engineering Consulting Group Co.Ltd(000779) group, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Gansu Engineering Consulting Group Co.Ltd(000779) group.
6、 Responsibilities of certified public accountants for the audit of financial statements
Our goal is to obtain reasonable assurance on whether the financial statements as a whole are free from material misstatement due to fraud or error, and issue an audit report containing audit opinions. Reasonable assurance is a high-level assurance, but it does not guarantee that the audit performed in accordance with the audit standards will always be found when a major misstatement exists. 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 carrying out the audit work in accordance with the 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. Since fraud may involve collusion, forgery, intentional omission, misrepresentation or override of internal control, the risk of failing to find major misstatement caused by fraud is higher than that caused by error.
(2) Understand the internal control related to audit to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies selected by the management and the rationality of accounting estimates and related disclosures.
(4) Draw conclusions on the appropriateness of management's use of going concern assumptions. At the same time, according to the audit evidence obtained, draw a conclusion on whether there are major uncertainties in the matters or circumstances that may lead to major doubts about the sustainable operation ability of Gansu Engineering Consulting Group Co.Ltd(000779) group. If we conclude that there is significant uncertainty, the auditing standards require us to draw the attention of statement users to the relevant disclosures in the financial statements in the audit report; If the disclosure is insufficient, we should express a non unqualified opinion. Our conclusions are based on the information available as of the date of the audit report. However, future events or circumstances may cause Gansu Engineering Consulting Group Co.Ltd(000779) group to be unable to continue its business.
(5) Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
(6) Obtain sufficient and appropriate audit evidence on the financial information of entities or business activities in Gansu Engineering Consulting Group Co.Ltd(000779) group to express an audit opinion on the financial statements. We are responsible for guiding, supervising and executing the group audit, and assume full responsibility for the audit opinions.
We communicated with the management on the planned audit scope, schedule and major audit findings, including the internal control defects that we identified in the audit.
We also provide a statement to the management that we have complied with the professional ethics requirements related to independence, and communicate with the management all relationships and other matters that may reasonably be considered to affect our independence, as well as relevant preventive measures (if applicable).
From the matters communicated with the management, we determine which matters are the most important for the audit of the current financial statements, thus constituting key audit matters. We describe these matters in the audit report, unless laws and regulations prohibit the public disclosure of these matters, or in rare cases, if the negative consequences of communicating a matter in the audit report are reasonably expected to exceed the benefits in the public interest, we determine that we should not communicate the matter in the audit report.
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YONGTUO Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner): Xu Kemei
Beijing, China Certified Public Accountant: Huang Li
April 19, 2002
