The Quality Of Accounting Information Determines The Success Or Failure Of IPO

With the approval issued by Sanjin pharmaceutical IPO, the IPO trial, which began in September 16, 2008, has finally been reactivated.

At the same time, the SFC also began to formally accept the application materials of gem enterprises, the first batch.

In enterprises, they are eager to borrow directly.

Through summarizing and studying the quality of accounting information involved in the enterprises in the initial audit of China in recent years, we hope to make the listed companies strictly abide by the accounting standards and disclosure requirements of accounting information in the restructuring stage and daily operation activities, and improve the passing rate of the listed companies.

This article will be divided into three parts to analyze the key financial problems involved in the listing process.

Financial problems involved in the stage of enterprise restructuring

The financial problems involved in the reform of the shareholding system of enterprises are mainly the accounting treatment and tax treatment when the overall changes occur.

When the enterprise is changed as a whole, it should be converted into shares of the joint stock company based on the datum of the daily datum audited by the change datum, and the difference between the net assets of the base date and the face value of the folded shares shall be changed into the "capital surplus equity premium" rather than the discount of 1:1 according to some enterprises.

In the course of change, the tax treatment of individual holdings can be dealt with in accordance with the following principles: (1) in accordance with the audit results, 1:1 will be converted into registered capital, and the individual shareholding portion will not be paid personal income tax; (2) no personal income tax will be imposed when capital reserve is added to capital stock; (3) the surplus reserve fund and undistributed profit share capital belong to the distribution of dividends and dividends, and the amount of red shares acquired by individuals should be taxed as personal income.

It should be noted that capital shares, surplus reserves and undistributed profits belong to the shareholders of legal persons, which are different from individual shareholders. When a company makes dividends, the legal person shareholders do not need to pay income tax.

However, if a legal person shareholder is not in conformity with the income tax rate applicable to the company, the legal person shareholder is required to pay the difference of the income tax.

Problems of accounting information that should be paid attention to in daily business activities

WIND information data showed that the IPO pass rate in the 2006-2008 years after the split share structure reform was 83.78%, 70.48% and 82.76% respectively.

That is, in the last three years, an average of 19.38% of enterprises will be denied due to defects in accounting information quality, business models and continuous profitability.

The part of the enterprises involved in the quality of accounting information mainly includes the following aspects:

1. revenue recognition.

The four principles of revenue recognition should be controlled according to the specific operation mode of enterprises and the accounting standards of enterprises.

In particular, the new economy and new business model enterprises should fully reveal the unique business models and risk characteristics of the industry and enterprises, grasp the substantive characteristics of the revenue recognition, and properly and flexibly combine their actual operation and accounting conditions to determine the principles of their company revenue recognition and disclose them fully.

For example, if an enterprise realizes zero inventory, only when an enterprise's product is used by the customer can the revenue be recognized. When the product is issued, the revenue can not be recognized.

2. financial independence.

It is mainly related to pactions and capital occupation between shareholders.

For related party pactions, it is necessary to make clear the purpose and necessity of related pactions, the reasonableness of pricing and the appropriateness of accounting treatment. In the process of auditing, the tendency to identify related party pactions should be diminishing year by year, in order to prove the independence of the listed companies.

Shareholders' occupation of funds, the current whitewash techniques in financial performance is particularly hidden.

However, the financial support provided by shareholders to the listed companies, such as the interest of the listed companies, and the interest of the shareholders' exemption or reduction, do not have a significant impact on the profits of the listed companies in the current period, but generally do not constitute obstacles.

3. the difference between the original report data and the audit report.

It is normal that there are audit adjustments between the two statements, and no difference is often considered abnormal.

By comparing the two tables, we can find out whether the enterprises are imaginary income and profits, and whether the tax payments involved are timely.

For example, the income of the original report and audit report of a company in 2008 was 16 million yuan and 24 million yuan respectively, accounting for 80% and 72% of the current reporting amount.

Although the income tax was concentrated at 15 million yuan in 2007, it was judged to be weak in accounting basis and imperfect in core.

4. tax issues involved in accounting information.

It is found in practice that preferential tax policies enjoyed by some enterprises are not in conformity with the law. Such a case should be issued by the provincial tax authorities.

Some local tax authorities approve the enterprises' so-called "slow payment" tax exceeding their powers.

A considerable number of enterprises have hidden income before listing, but in order to be listed, they have to pay related taxes, and some enterprises have paid taxes in order to create income.

Paying taxes is especially prominent in private listed companies.

In recent years, most of the companies that have been rejected because of their weak financial foundation also have tax problems.

For example, a paper-making enterprise has paid up nearly one hundred million of the value added tax for the performance of the decoration period, and was eventually persuaded back by the regulatory authorities on the basis of weak accounting basis.

If the tax adjustment caused by audit adjustments is less, it is generally not higher than 30% of the current tax amount. If fully disclosed, it is also permitted, but VAT is generally regarded as a high voltage line, which easily leads to many financial daydreams.

5. non recurring gains and losses account for the proportion of current profits.

The characteristics of non recurring gains and losses decide that it does not have continuity. If the non recurring gains and losses account for a relatively high proportion of the current profits of enterprises, it is often understood that the continuous profitability of enterprises is limited, the profitability of enterprises is weak, and the future operating performance is relatively uncertain.

6. abuses accounting policies and accounting estimates.

At present, the choice of accounting policies for listed companies is generally more standardized. The new accounting standards are prudent provisions for the preparation of bad debts and the preparation of depreciation.

It is worth mentioning that the safe production costs for enterprises with high risk industries should be handled according to the specific requirements of the accounting standards for enterprises (2008). They should be separately listed under the "special reserve" item under the owner's equity "surplus reserve" and no longer listed as liabilities.

The cost of maintenance for a coal enterprise outside the depreciation of fixed assets should be treated according to the principle of safe production cost.

7. financial analysis of recruitment and investment projects.

This is a detailed analysis and demonstration of the changes in gross margin and its impact on the profitability of enterprises in the prospectus, which is an important reference for judging whether enterprises can maintain their profitability after financing.

Potential off balance sheet financial risk

Off balance sheet financial risks refer to pactions or events that do not include a balance sheet, a profit statement and a cash flow statement, but have a potentially significant impact on asset quality and continuous profitability, which need to be explained in the notes to the accounting statements.

These potential pactions or matters, when meeting certain confirmation conditions, will be pferred to the table business.

Because of its large freedom, weak continuity, poor standardization, poor pparency, and high risk, it will have a significant impact on investors' understanding of prospectus, and even lead to wrong judgment by investors. At the same time, it is also not conducive to the understanding and prevention of risk by managers, and is not conducive to supervision of regulators.

1. guarantee problem.

At present, due to the relatively standardized requirements of the listed companies, the company needs to examine and approve the different rights organizations according to the specific circumstances, such as the board of directors or shareholders' meetings.

In the process of standardizing the guarantee, the listed companies are accustomed to "one size fits all" and even pay larger financial costs to relieve the guarantee.

In fact, the problem of guarantee is not allowed, but can not be guaranteed by violation, but it needs special care in terms of quantity and nature.

It is suggested that the listed companies should refer to the standard requirements of the listed companies for guarantee, and make disclosure according to the articles of association of the listed company in accordance with the provisions of the company's approval authority and procedures, so as not to increase the operating risk of the listed company.

2. other potential uncertainties in financial risk.

Other potential financial risks are mainly concentrated in potential contract disputes, quality disputes, equity disputes, tax risks, potential debt disputes, and so on, including the status or environment in which the listed companies are located or will have significant adverse changes. These factors will have potential constraints on the company's business performance.

The author believes that the listed companies should strictly abide by the accounting standards under the guidance of financial advisors or sponsors, consciously eliminate financial tricks, standardize financial treatment, ensure accurate, truthful and complete accounting information disclosure, avoid inconsistent accounting information in the prospectus, improve the quality of accounting information, provide investors with a real investment value judgment basis, and also be a necessary condition for the listed companies to pass the audit.