Two Risk Criteria For An Accounting Firm

Similarly, two listed companies in Fujian had two different standards and proportions in carrying out the impairment calculation in connection with the sequel of Dapeng securities bankruptcy. The two companies responsible for the audit were the same accounting firm. There were two different subtraction accounting standards. It is said that the accountants who are responsible for the two listed companies are two different companies of the company. In early 5, Dapeng securities was ordered to close by the China Securities Regulatory Commission for bankruptcy and liquidation procedures because of serious violation of the regulations.

A total of about 14 listed companies, such as Dapeng securities, Dapeng holdings and Dapeng venture capital, have invested more than 500 million yuan in long-term investment impairment.

However, it was found that the proportion of the company's annual reports was not the same. Except for bus shares, the investment in science and technology, Zhongda shares, Northeast Expressway, Quan Chai power, first food, North Asia Group, Keyuan group, Jiangxi cement and Qilian Mountains and other listed companies accounted for 100% of the value reduction.

All of the listed companies are not so familiar with the investment risk of ROC holdings and Dapeng venture two companies: the whole Chai power has made 100% of the value reduction for Dapeng holding company, and the East China technology has made 50% of the depreciation allowance, while the bus shares have not prepared the allowance for impairment. The construction shares have made 28% of the Dapeng venture capital preparation, while the Yongan forestry has only 21.35%.

Although no matter whether the current report is fully selected or not, it is consistent with the accounting standards. Investment profit and loss is only a matter of time on the profit statement and balance sheet. However, because of this "time difference", it is possible for a listed company to whitewash its business performance through surplus management.

Data show that Yongan forestry holds 75 million legal person shares of Dapeng venture capital, with a total investment of 77 million 500 thousand yuan and a shareholding ratio of 15%. It is the second largest shareholder of Dapeng venture capital. The largest shareholder of Vc firms is Dapeng holding limited liability company, while Dapeng Holding Company Limited is the actual controller of Dapeng securities.

Therefore, in 2004, the company withdrew an investment impairment of 16 million 520 thousand yuan, according to the investment face value of 77 million 380 thousand yuan, the ratio was 21.4%.

Xiamen construction and development Limited by Share Ltd invested 40 million 400 thousand yuan to share the capital of Dapeng venture capital limited liability company, with a shareholding ratio of 8%. In 2004, the company raised 11 million 312 thousand yuan, accounting for 28% of its total book investment.

The annual reports of Yongan forestry and Jian FA share are all audited by Xiamen Tian Jian Hua Tian accounting firm, but their proportion of the impairment allowance prepared by Dapeng venture capital is different.

If Yongan forestry plans to prepare the depreciation allowance according to the same proportion of the shares issued by the construction company, the company will increase its long-term investment depreciation allowance of 5 million 180 thousand yuan, while the net profit of the company in 2004 will be only 4 million 340 thousand yuan.

Therefore, if it is not through earnings management, Yongan forestry will suffer losses in 2004 due to large amount of impairment provision.

Earnings information is the core content of the annual reports of listed companies, and independent, objective and fair audit reports are important basis for investors to make decisions.

Why face the same investment risk, the proportion of the two companies that are audited by the same accounting firm is different?

What is the listed company based on what determines the amount?

The "capital market" reporter interviewed the relevant persons of Jian FA shares and Yongan forestry. They agreed that the plan was based on two aspects: first, although Dapeng venture capital invested 360 million yuan in 500 million yuan capital to the financial management of Dapeng securities, but according to the usual practice, it would recover about 10% of the capital after the reckoning. Second, although it failed to obtain the annual audit report of Dapeng venture capital, the venture capital of Dapeng venture has been developing well in the past few years.

After consulting the report of Dapeng venture capital company, the company forecasted the recoverable funds.

This prediction has been approved by the auditing department.

An anonymous person from Yongan forestry Securities Department told reporters that the estimated amount calculated by the company's financial department is reasonable and accurate.

However, the reporter noted that if the investment of Dapeng venture capital can be recovered by 70%, then the profits of Dapeng venture capital in venture capital will be no less than 300 million yuan.

In recent years, the return rate of ROC ventures to shareholders has been maintained at around 5%.

A certified public accountant who does not want to be named, the accountant of Xiamen Tian Jian Hua Tian, who is responsible for auditing the construction of shares and Yongan forestry, told the capital market reporter that the company had communicated with the two companies on the impairment of Dapeng venture capital, but the accounting report form of the annual report was compiled by the listed company itself, not the one designated by the firm, and it could not be exactly the same.

Although it is affected by the closure of Dapeng securities, it is still unknown whether Dapeng venture will be auctioned or liquidated. The audit institutions respect the listed companies to make their own judgement on the future of Dapeng venture capital.

It can not be said that it is right to build 28% shares, and Yongan forestry is 21% wrong.

Listed companies have their own estimates. If the accounting basis is adequate and the method is reasonable, we have no reason to disagree.

If, as mentioned above, there is no definite rule in how many percentage of depreciation allowance to be prepared, how can we make accounting information closer to reality and enable investors to know more about the operating conditions of listed companies?

In fact, this largely depends on the objective attitude, professional experience and professional judgment of the auditor.

The company is responsible for auditing by the same accounting firm. The two companies of building shares and Yongan forestry have made different accounting estimates for the same accounting event. Such accounting information lacks credibility to a certain extent, and the result will make accounting information lose its fairness and reliability. Such information not only misleads investors, but also causes investors to question whether the listed companies and accounting firms are complicit.

In the interview with reporters in the capital market, the CPA said that as a small and medium-sized investor, if there is a difference in the proportion of Yongan's forestry investment to Dapeng venture capital, we should make our own judgement on the stock market risk.

Is there any suspicion and responsibility for auditing firms to mislead investors, to deceive the market and to shield companies from whitewashing their achievements?