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Accounting fraud to deal with heavy punishment —— Listed companies with double deposits and loans face key audits

来源:经济日报 January 9, 2020 00:00 Source: Economic Daily

Since 2019, a series of accounting fraud cases have been exposed in the capital market, causing concern. The Ministry of Finance has put forward a series of requirements for accounting firms to improve the quality and level of audit services and do a good job of auditing the annual report for 2019. In terms of grasping the audit risk, it is required to increase the auditing of "deposit and loan" dual-high listed companies, local financial institutions, local financing platforms and state-owned enterprises.

Entering the new year, enterprises will successively publish the results of the previous year, and the annual report is highly concerned by the market. The true and complete accounting information of enterprises requires the auditing supervision of accounting firms.

On January 7, the Ministry of Finance convened a video conference on auditing and supervision of the annual report of enterprises, which put forward requirements for doing a good job of auditing the annual report of enterprises, and clearly punished severe violations in the audit of annual reports.

Deep-level issues need attention

The quality of corporate accounting information and the quality of intermediary agencies' practice have always attracted attention from society and the market. In particular, since 2019, the capital market has successively exposed a series of accounting fraud cases such as Kang Dexin and Kang Mei Pharmaceutical. Audit firms failed to find problems or failed to issue appropriate audit opinions, which caused heated discussions.

At the meeting, Liu Feng, the second inspector of the Supervision and Evaluation Bureau of the Ministry of Finance, briefed the accounting supervision and inspection work in the past two years and the main problems found.

"Focus on the pain points of society and people's livelihood, and carry out in-depth inspection of the quality of accounting information in the pharmaceutical industry." Throughout the settlement process, a penetrating inspection was implemented.

Focus on the practice risk focus, and earnestly do a good job of quality inspection of accounting firms. After completing a comprehensive audit of 40 securities accounting firms in 2018, starting from 2019, the Ministry of Finance has launched a second round of audits of securities accounting firms, and selected 4 accounting firms to conduct practice quality inspections. .

Focusing on industry plugging points, we will continue to address outstanding issues in the practice of non-secure accounting firms. "Some non-securities-qualified accounting firms have excessively pursued economic interests, relaxed their practice quality management, and harmed the industry's image of fairness and integrity. The Supervision and Evaluation Bureau has organized local financial departments to carry out special rectification work for several consecutive years, and effectively control the practice of registered practices, selling reports, Price competition and other issues have achieved good results. "Liu Feng said.

"In recent years, accounting firms have increased their awareness of risk and their level of practice has improved. However, the inspection also found that some deep-seated problems in the CPA industry have not yet been effectively addressed, which seriously affected the quality of practice." Liu Feng said.

The report shows that these deep-seated problems include inadequate internal governance of the firm, failure to abide by independence, inadequate management of business undertaking management, inadequate implementation of audit procedures, failure of internal review barriers, non-securities-qualified accounting firms' registered practice and “selling "Reporting" is more serious.

It is reported that for the reasons of maintaining client relationships and safeguarding the firm's income, some firms turned a blind eye to the signs of fraud that they had been concerned about, losing their independence and professional ethics. In the same year that the Provincial Department of Finance initiated the "clearance of name" work, There were 666 registered certified public accountants practising; the proportion of "selling reports" in individual firms exceeded 70% of the total reported by the firm.

Statistics show that in 2018, financial departments at all levels inspected 1080 accounting firms and inspected 18,476 enterprises and institutions. 88 accounting firms were punished, of which 21 were suspended and 3 were revoked; 140 certified public accountants were punished, of which 53 were suspended and 5 were withdrawn from practice. In 2019, financial departments at all levels inspected 1,209 accounting firms and 23,922 enterprises and institutions. The inspections were basically completed and are being followed up.

Crack down on accounting fraud

At present, downward pressure on the economy is increasing. Under such circumstances, the pressure on corporate performance has increased, and the motivation for fraud has increased. It is necessary for financial departments and accounting firms at all levels to work together to do a good job of auditing the annual report for 2019 to ensure that the accounting information of the enterprise is true and complete.

"Under the current environment, severe punishment for a few black sheep who disrupt market order and strongly reflect on society is the best guarantee for the credibility of the industry and the best protection for the development of the industry." Said Wu Jinxing, director of the Supervision and Evaluation Bureau of the Ministry of Finance. One step of the financial supervision and inspection institutions should effectively perform their supervision responsibilities under the law, severely crack down on accounting fraud, rectify and standardize market order, and enhance the industry's social credibility.

It is reported that, in accordance with the new "Double Filing" regulatory requirements of the "Securities Law", the Ministry of Finance will study and adjust the "point-to-point" division of labor, optimize the administrative supervision mechanism of accounting firms, and fully mobilize the enthusiasm of the Supervision Bureau and the Department of Finance (Bureau) to work together Good accounting supervision.

"Focus on the key points, severe punishment and severe punishment, and further increase the intensity of inspection and punishment." Xi Jinxing said that on the basis of continuing to carry out comprehensive audits of accounting firms, the focus was on increasing the scale of business, high risk of practice, and continuous administration. The auditing intensity and frequency of the punished accounting firm immediately raised issues such as “receiving the home”, “changing the vest” and “selling reports”, and timely investigated and dealt with major audit failure clues exposed by the media; Both the accounting firm and the certified public accountant with significant audit responsibilities shall impose administrative penalties.

The Ministry of Finance has put forward a series of requirements for accounting firms to improve the quality and level of audit services and do a good job of auditing the annual report for 2019. In terms of grasping the audit risk, it is required to increase the auditing of “deposit and loan” dual-high listed companies, local financial institutions, local financing platforms and state-owned enterprises.

"For listed companies with high deposit and loan ratios, focus on the authenticity of financial assets such as monetary funds and the cash flow of business operations, and increase bank deposits, operating income costs and large amounts of current transactions, especially for related party transactions and overseas transactions. Auditing efforts. "Liu Feng said.

At the same time, the local supervision bureaus must follow up the entire process, understand the annual reports and audits of listed companies and key enterprises in their jurisdictions, and promptly remind and supervise accounting firms when they find any doubts to enhance the timeliness, pertinence and effectiveness of supervision. Local financial departments shall continue to carry out special control over the practice of registered practice and selling reports, increase punishment, resolutely clean up the black sheep, and constantly rectify the market order. (Economic Daily, China Economic Network reporter Zeng Jinhua)

(Responsible editor: Wang Jupeng)

Accounting fraud to deal with heavy punishment —— Listed companies with double deposits and loans face key audits

来源:经济日报 2020-01-09 00:00 Source: Economic Daily
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