Audit Of Profit And Profit Distribution

The enterprise accounting system stipulates: "profit refers to the operating results of a company during a certain period, including operating profit, other business profits, gross profit and net profit."

The relevant formulas of profit are: gross profit, investment income, investment income (extra investment income), operating expenses, operating expenses, main business revenue, main business cost, main business tax and additional business profit, other business income: other business expenses, other business expenses: net profit = gross profit - income tax. The People's Republic of China Provisional Regulations on enterprise income tax stipulate: "taxpayers' losses can be compensated by the income of the next year; the income of the next tax year can not be compensated, but it can be made up every year, but the longest period of compensation can not exceed 5 years. The logical relationship between profit and profit can be expressed by formula.

The 5 year recovery period is calculated from the first year of the loss year. Whether it is profit or loss for 5 consecutive years, it is calculated as the actual compensation period.

The deficit that has not been made up within 5 years should be made up from the enterprise's after tax profit or surplus fund from sixth years. "

In addition, the company law also stipulates: "the company's provident fund is used to make up for the loss of the company, expand the production and operation of the company, or turn it into an increase in company capital.

When the Limited by Share Ltd decides to convert the provident fund into capital by resolution of the general meeting of shareholders, new shares shall be distributed or the par value per share shall be increased according to the original share ratio of the shareholders.

However, when the statutory provident fund is converted into capital, the remaining reserve fund shall not be less than 25% of the registered capital. "

For this purpose, when audited by a certified public accountant, a certified public accountant should find out whether the company has made up the deficit or increased profits and profits, and the circumstances of the withdrawal of the provident fund.

If the enterprise fails to make up the deficit or make any withdrawal of the provident fund, the CPA should submit the adjustment to the audited entity.

The enterprise accounting system also stipulates: "the annual profit distribution plan approved by the board of directors or similar institution to the shareholders general assembly or similar institution, except for the stock dividend distribution scheme, shall be included in the profit distribution table of the reporting year before the shareholders' meeting or similar institution convenes a meeting.

When the profit distribution plan approved by the shareholders' meeting or similar institution is inconsistent with the annual profit distribution plan of the report submitted by the board or similar institution, the difference should be adjusted at the beginning of the year.

Accordingly, the enterprise first develops a profit distribution plan by the board of directors, and makes financial treatment accordingly, and puts it into the profit distribution table of the reporting year, and lists the stock dividends in the notes to the report.

After approval by the shareholders' meeting or similar institution, dividends can be issued, and the profit distribution plan approved by the shareholders' meeting or similar institution is inconsistent with the annual profit distribution plan approved by the board of directors or similar organizations. The difference should be adjusted at the beginning of the relevant accounting items.

When auditing the profit and profit distribution items of audited units, the CPA should pay close attention to the following special auditing procedures: 1. combines the audit of income, income, cost and expense to check whether the collection of profits is correct.

2. checks whether the calculation of tax adjustment is correct and the accounting process is correct, so as to determine whether the net profit is correct.

3. checks whether the source and order of profit distribution conform to the relevant regulations.

4. checks whether the use of capital reserves, surplus reserves and undistributed profits are reasonable, and whether the accounting treatment is correct.

5. checks the loss to make up for compliance with the relevant regulations.

In addition, when auditing the profit and profit distribution items, CPA will also encounter some common accounting errors and disadvantages. It should be noted that 1. is unprofitable because of its excess income or revenue, costs and expenses.

2. due to the wrong calculation of taxable income, the accrued income tax is unreal and affects net profit.

3. makes up the deficit that is not supposed to make up for losses before tax, and makes use of pre tax profits to make up for the income tax.

4. whether the confirmation of pre tax profits to make up for losses is in conformity with the provisions of the tax law, whether it is approved by the intermediaries, and whether the compensation period is in conformity with the provisions of the tax law.

5. capital reserves, surplus reserves, undistributed profits, capital gains and losses are in compliance with relevant regulations.

6. public welfare fund is not used for the expenditure of employees' welfare facilities, but for other purposes.

7. after tax profits, dividends or profits are allocated without making up for the previous year's losses or drawing the provident fund.

8. after tax profits, does the provident fund meet the requirements?

9. company uses the after tax profit to extract the incentive fund and reward the top management of the company.

During the audit of CPA, the audit of profit and profit distribution should consider some special auditing procedures of profit and profit distribution audit, as well as some common mistakes and mistakes in audit of profit and profit distribution. This period will be analyzed through specific cases.

In the audit of A company's accounting statements in 2003, certified public accountants learned that the company's board of directors held the company's board of directors in January 1, 2003, and the profit distribution plan formulated by the board of directors is as follows: 2003 realized net profit of 4 million 500 thousand yuan in 2003, 10% of the net profit in 2003, and 5% of the statutory public interest fund, and no dividend surplus, and 1 million yuan of common stock dividends.

Deal with: 1.: borrow profit distribution -- extract the statutory surplus 225 000: Loan: surplus reserve: statutory surplus fund 450000 - 2003: statutory public welfare fund 225000: the profit distribution is to deal with common stock dividends: 1000000 dividends: 1000000 dividends payable: dividends payable 1000000 2. 2. profit distribution scheme: profit distribution - undistributed profits 1675000: Credit: profit distribution - to deal with common stock dividends 1000000 1000000 profit distribution - extract statutory surplus earnings 450000 450000 profit distribution - extract the statutory public welfare 225000 3. certified by certified public accountants, confirming that A achieved net profit in 2003. Accordingly, A company adjusts its accounting statements for 2003, as follows:

The CPA submitted an audit report to A company on 23 April 2004, and the A company's financial report was actually reported in April 25, 2004.

The shareholders' meeting was held in May 12th, and confirmed by the shareholders' meeting that the new profit distribution plan is as follows: in the year of 2003, the gross profit of the net profit is 10%, and the 5% is the statutory public welfare fund. The surplus surplus should be extracted from the net profit of 10% in 2002, and 1 million 200 thousand yuan should be distributed to the common stock.

Cash dividends were issued in May 18th.

An analysis of the "profit distribution" in the enterprise accounting system - accounting subjects and accounting statements: "the annual profit distribution plan approved by the board of directors or similar institution of a board of directors to the shareholders general assembly or similar institution shall be included in the profit distribution table of the reporting year before the shareholders' meeting or similar institution is convened.

The company uses surplus surplus to make up for the loss, debit "surplus surplus" subjects, and credit this subject (other pfers).

In addition, when enterprises extract surplus reserves and statutory public welfare funds according to the regulations, they should borrow this subject, including the withdrawal of statutory surplus reserves, the withdrawal of statutory public welfare funds, the withdrawal of reserve funds, and the withdrawal of enterprise development funds, and credited the subject of "surplus reserves - statutory surplus reserves, statutory public welfare funds, reserve funds and enterprise development funds".

Cash dividends or profits that should be allocated to shareholders are debited in this subject (payable to common stock dividends) and credited to the subject of payable dividends.

Foreign investment enterprises return their investments with profits, debit the subjects (profits return the investment), credit the "surplus surplus - profits return investment" subjects, and the employee bonus and welfare funds extracted from the net profit by foreign investment enterprises, borrow the subject (the employee award and welfare fund), and credit the "payable welfare" subject.

When the profit distribution plan of the shareholders' meeting or similar institution is inconsistent with the annual profit distribution plan approved by the board of directors or similar organizations, the difference should be adjusted at the beginning of the relevant annual accounting statements, adjusted the increased profit distribution, debited the undergraduate items (undistributed profits), credited "surplus surplus" and other subjects, adjusted the reduced profit distribution and made the opposite accounting entries.

According to this, the CPA approved the adjustment and disclosure of A's accounting statements for the year 2003.

After the shareholders' meeting is held by A, where the profit distribution plan approved by the shareholders' meeting is not in conformity with the original plan approved by the board of directors, the enterprise shall make corresponding adjustments and modify the number of early years of the 2004 annual report.

The accounting treatment of A company is: accounting for profits: the profit distribution is to extract any surplus surplus, 450000 profit distribution, namely, to meet the common stock dividend of 200000 yuan: the surplus surplus -- any surplus surplus, 450000 dividend payable 200000 dividend, and the number of early May 2004 reports as follows: the balance sheet item: the undistributed profit at the beginning of the year is reduced by 650 thousand yuan, the surplus reserve is increased by 450 thousand yuan, and the dividend payable is increased by 200 thousand yuan.

In the specific issue of common stock dividends, the company borrows 1200000 dividends: 1200000 of bank deposits.