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audit report
Dhsz [2022] No. 0010999
Dahua Certified Public Accountants (special general partnership)
DaHuaCertifiedPublicAccountants（SpecialGeneralPartnership）
Wrong! Reference source not found.
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Contents page I. audit report 1-7 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 1-102
Dahua Certified Public Accountants (special general partnership)
12 / F, building 7, yard 16, Middle West Fourth Ring Road, Haidian District, Beijing [100039]
Tel: 86 (10) 58350011 Fax: 86 (10) 58350006
www.dahua-cpa. com.
Audit report
Dhsz [2022] 0010999 error! Reference source not found. All shareholders:
1、 Audit opinion
We made a mistake! Reference source not found. (hereinafter referred to as error! Reference source not found.) The financial statements include 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 notes to relevant financial statements in 2021.
In our opinion, the attached financial statements have been prepared in accordance with the accounting standards for business enterprises in all material aspects and fairly reflect the errors! Reference source not found. The financial position of the consolidated and parent company as of December 31, 2021 and the operating results and cash flow 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. According to the code of professional ethics of Chinese certified public accountants, we are independent of mistakes! Reference source not found., And 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、 Highlight matters
We remind users of financial statements to pay attention, such as notes XIII, (I) and 1 As mentioned above, as of the date of issuance of the audit report, Changshu Guorui Technology Co.Ltd(300600) will file a lawsuit within the statutory time limit due to a series of civil litigation cases between multi mesh cloud data processing communication machine business and Nanjing Changjiang Electronic Information Industry Group Co., Ltd., Fushen Industrial Company and Harbin comprehensive bonded Group Co., Ltd. due to criminal filing, which have been rejected by the relevant courts.
For example, note 6 of note 6 to the consolidated financial statements As for other receivables, as of December 31, 2021, due to the multi mesh cloud data processing communication machine sales business carried out by Fushen Industrial Company and Harbin comprehensive bonded Group Co., Ltd., the company has formed a closing balance of 14801377540 yuan from the above companies, and a full provision for bad debts has been made. The recovery of the above funds is uncertain.
As shown in note 7 of note VI to the consolidated financial statements According to the inventory, as of December 31, 2021, there are still 14729665151 yuan of finished products of multi mesh cloud data processing communication machine business in the company's warehouse, and 9844629951 yuan of inventory falling price reserves have been withdrawn according to the standards. There is uncertainty in the subsequent performance of the above contracts.
The contents of this paragraph shall not affect the issued audit opinion.
4、 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. Recognition of operating income
2. Impairment of accounts receivable
（1） Recognition of operating revenue
1. Event description
Changshu Guorui Technology Co.Ltd(300600) is mainly engaged in the manufacturing and sales of ship power distribution system and ship engine room automation system.
As stated in note 4 (33) and note 31 of note 6 to the consolidated financial statements, Changshu Guorui Technology Co.Ltd(300600) operating income is RMB 22008974781. Since operating income is one of the key performance indicators of Changshu Guorui Technology Co.Ltd(300600) and there may be inherent risks for the management to achieve specific objectives or expectations through inappropriate revenue recognition. Therefore, we identified revenue recognition as a key audit matter.
2. Audit response
(1) Understand the key internal controls related to revenue recognition, evaluate the design of these controls, determine whether they are implemented, and test the operation effectiveness of relevant internal controls;
(2) Select samples to check the sales contract, identify the contract terms and conditions related to the transfer of commodity control, and evaluate whether the revenue recognition time point meets the requirements of the accounting standards for business enterprises; (3) Analyze the income and gross profit in combination with the product type to judge whether there is abnormal fluctuation in the amount of income in the current period;
(4) Select samples of revenue transactions recorded in this year, check invoices, sales contracts and delivery orders, and evaluate whether relevant revenue recognition complies with the accounting policies of the company for revenue recognition;
(5) Select a sample of revenue transactions recorded before and after the balance sheet date, check the delivery note and other supporting documents, and evaluate whether the revenue is recorded in the appropriate accounting period; (6) The important customers on the balance sheet date shall be confirmed by sampling, including: the balance at the beginning and end of the relevant accounts receivable advance collection period, the cumulative amount of invoices issued and the cumulative amount of revenue recognized.
Based on the audit work performed, we believe that the recognition of Changshu Guorui Technology Co.Ltd(300600) operating revenue is in line with the accounting standards for business enterprises for revenue recognition.
（2） Impairment of accounts receivable
1. Event description
As shown in note 4 (13) and note 3 of note 6, as of December 31, 2021, the book balance of Changshu Guorui Technology Co.Ltd(300600) accounts receivable was 46709991686 yuan, the bad debt provision was 6940172772 yuan, and the book value was 39769818914 yuan.
Due to the large amount of bad debt provision for accounts receivable in the current period, the management made significant judgment when determining the impairment of accounts receivable, so we identified the impairment of accounts receivable as a key audit event. 2. Audit response
(1) Understand the key internal controls related to the impairment of accounts receivable, evaluate the design of these controls, determine whether they have been implemented, and test the operation effectiveness of relevant internal controls; (2) Review the subsequent actual write off or reversal of accounts receivable for which bad debt reserves have been accrued in previous years, and evaluate the accuracy of previous forecasts of the management;
(3) Review the relevant considerations and objective evidence of the management's credit risk assessment of accounts receivable, and evaluate whether the management has properly identified the credit risk characteristics of various accounts receivable; (4) The management shall check the accuracy of the forecast of the individual cash flow and the forecast of the expected cash flow, and check the accuracy of the forecast of the individual cash flow with that of the management; Focus on the projects with significant financial risks of the owner, and obtain sufficient evidence to judge whether the expected credit loss is fully accrued;
(5) For accounts receivable whose expected credit loss is measured on the basis of portfolio, 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 and completeness of the data used by the management (including accounts receivable aging, historical loss rate, migration rate, etc.) and whether the calculation of bad debt reserves is accurate;
(6) Check the post period collection of accounts receivable and evaluate the rationality of the management's provision for bad debts of accounts receivable;
(7) Check whether the information related to accounts receivable has been properly presented in the financial statements.
Based on the audit work performed, we believe that the management's judgment and estimation on the impairment of accounts receivable are reasonable.
5、 Other information
Wrong! Reference source not found. The 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 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.
6、 Responsibilities of management and governance for financial statements
Wrong! Reference source not found. 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.
Error in preparing financial statements! Reference source not found. Management is responsible for evaluating errors! Reference source not found. Ability to continue as a going concern, disclose matters related to going concern (if applicable), and apply the going concern assumption, unless the management plans to make liquidation errors! Reference source not found Terminate the operation or have no other realistic choice.
The management is responsible for monitoring errors! Reference source not found. Financial reporting process.
7、 Responsibilities of certified public accountants for the audit of financial statements
Whether the overall audit report contains material errors due to fraud or assurance, and whether the audit report contains material errors. 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 a conclusion on the appropriateness of the going concern assumption used by the management. At the same time, according to the audit evidence obtained, it may lead to errors! Reference source not found. Draw a conclusion on whether there is significant uncertainty in the matters or circumstances that have major doubts about the ability to continue as a going concern. If we conclude that there are significant uncertainties, the auditing standards require us to draw the attention of report 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 lead to errors! Reference source not found. Inability to continue as a going concern
