The Last Thunder Of The Annual Report: 195 "Non-Standard" Financial Reports Come Out, Dahua And Lixin Sell The Most.

In May 6th, three independent directors of Yu diamond responded to the inquiry letter of the Shenzhen Stock Exchange, explaining the "fidelity" situation of Henan diamond annual report.

Last week, the annual report of Yu diamond, one of the largest "thunder pit" in the 2019 annual report, was questioned by the auditing body and the independent director. Audit institutions Asia Pacific accounting firm issued reservations about it, pointing to the "appropriateness of estimated liabilities", "the appropriateness of debt and asset impairment" and so on.

Meanwhile, on the board of directors, Zhang Ling and Yin Xiaohua, independent director of Yu diamond, voted against the motion on the annual report of <2019 and its summary. Yin Xiaohua also referred to the company's "suspicion of abusing the principle of prudence". "Prepaid items in stock are words and paintings, valuations are very uncertain" and "the whereabouts of equity transfer is unknown".

However, until the deadline, the reporter could not contact the above director to explain the incident further.

The encounter of Henan diamond annual report has opened the corner of the "non standard" opinion tide of the annual report disclosure season. As of April 30th, in addition to the delayed disclosure of 127 enterprises' annual reports due to epidemic situation and other reasons, 3711 listed companies in Shanghai and Shenzhen two cities have published their annual reports, of which 195 enterprises have been issued "non-standard opinions", accounting for 5.25%.

"Non-standard opinions have different effects on the operation of the company according to the severity. Negative opinions or inability to express opinions are more serious. They will be implemented to warn the risk of delisting, or even face the delisting. The opinion of reservations and unqualified opinions with emphasis will be relatively small, but it will also attract investors' attention." A medium-sized brokerage investment bank in Southern China has been interviewed.

Reproduction of "non standard" tides

Of the 195 listed companies that issued "non standard opinions" by the accounting firms, 91 of them had no reservations, 85 were unable to express their opinions and 19 had no negative opinions.

In 2016, 2017 and 2018, there were 96 listed companies, 118 companies and 217 listed companies. Since more than 100 listed companies did not disclose the annual report in 2019, it is not yet clear whether the non standard opinions in 2019 annual report will exceed the scope of 2018. However, in the past two years, the number of non-standard opinions issued by audit institutions has been greatly improved.

"The new securities law has set some clear accountability clauses for the responsibility of the intermediary audit institutions, and the responsibility for the senior executives is more clear. Some of the audit institutions of some of the enterprises have been more and more jointly (punished), and the audit institutions are more cautious when they issue their opinions." Pan Helin, executive dean of Digital Economics Research Institute of Zhongnan University of Economics and Law, pointed out.

In recent years, regulators have continuously strengthened the post supervision of intermediaries and increased the penalties for illegal and illegal actions. In 2019, 10 intermediary agencies were punished, involving the famous accounting firms such as Daxin, Zhonghua and Xinghua.

In the face of increasing pressure, the business environment of audit institutions is becoming increasingly stringent. A large auditing organization in Southern China pointed out to reporters: "we generally find that if a non-standard is possible, the withdrawal will not be done. If the customer fails to issue a non-standard bid, the client may not pay the bill, and the subsequent regulatory authorities will have a heavy workload in checking the manuscript."

Southern China a former listed company director also pointed out: "under the bottom line, there should be no big game space. If it is in a vague area, the listed companies and audit institutions will listen to the voice of the regulatory authorities or predict the direction of the regulatory authorities. "

? ? Specifically, the 195 issuers of non-standard opinions came from 36 audit institutions. Among them, the largest number of non-standard opinions were Dahua accounting firm and Lixin Accounting firm, which issued non-standard opinions on 23 listed companies, followed by the Asia Pacific Group accounting firm, and 15 non-standard opinions were issued, including Yu diamond and Zhang Zi Island. Asia Pacific audit firms.

According to the industry, the non-standard enterprises in 2019 were mainly concentrated in the media, mechanical equipment, electrical equipment, chemical industry and other fields. 21, 21, 12 and 11 enterprises were issued non-standard opinions respectively. Among them, the industry's poor climate and the reputation of the media, computers and other light assets industries, which have been dragged down by reputation, have become the "non-standard" opinions. The music industry, the Huayi Brothers, Huan Rui century, Tangde film and television, Guangdong Media and other enterprises have been issued non-standard opinions.

Risk matters are frequent

In 2019, the listed companies with non-standard opinions had different financial problems.

This includes mainly the inability to obtain adequate and appropriate audit evidence, major problems in the company's operational capability, doubt about its ability to continue operations, major legal actions, administrative investigations or other major uncertainties.

? ? For example, *ST believes that "internal control of financial reporting fails to operate effectively, resulting in failure to implement the necessary audit procedures", resulting in "failure to obtain sufficient and appropriate audit evidence to determine whether there is any material misstatement in the relevant financial statements. It is also not possible to determine whether it is necessary to make adjustment proposals or to determine the amount to be adjusted". Major uncertainties "and other issues.

Behind these non-standard opinions, listed companies often have common A share risk issues such as illegal guarantee, major litigation, tight funds, freezing of bank accounts, continuous years of losses, almost stagnation of main business, related transactions, capital occupation, and reasonable consideration of losses.

In the end of 2019, Yu diamond was involved in 42 lawsuits due to loans, guarantees and other major commitments, and the amount involved was 3 billion 860 million yuan. The relevant court decided to freeze and seal up 1 billion 218 million yuan of deposits, land, equity and other assets of Yu diamond bank. The company confirmed the loss of $267 million due to litigation, and confirmed that the payable amount was 353 million yuan.

According to the statistics of journalists, 124 companies that have been issued non-standard opinions have suffered losses, of which 75 companies have lost more than 500 million yuan, and 55 enterprises have lost more than 1 billion. *ST Saline Lake, *ST Xinwei and LETV lost more than ten billion.

In the profitable enterprises, the net profit level of HNA technology and HNA holdings reached the highest level of 869 million yuan and 755 million yuan respectively. However, the debt problem of the two companies has also aroused market concern due to the influence of Hainan Airlines Group.

By the end of 2019, the balance of Monetary Fund of HNA technology was RMB 6 billion 310 million yuan, short-term loans and non current liabilities due in one year were up to 1 billion 990 million yuan and 26 billion 510 million yuan respectively; HNA's current liabilities also exceeded the current assets of about 70 billion yuan. (Editor: Wu Yan Ling)

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