At the risk of "difficult labor" in annual reports, why should listed companies change audits?
Institutional data shows that since the beginning of 2022, more than 50 A-share listed companies have disclosed announcements that they have changed or plan to change their accounting firms.
Among them, some listed companies plan to replace the company's 2022 audit institution, but there are also some listed companies that want to replace the company's 2021 audit institution.
The disclosure of the annual report is imminent, and the behavior of listed companies to change audit institutions "on the spot" has also attracted the attention of the regulators.
According to industry insiders, changing the audit institution on the eve of the annual report disclosure is often easy to cause the annual report to be difficult to produce; in addition, if the annual report is not released on time, it will also affect the company's reputation and even business development.
The annual report is about to be disclosed, and listed companies such as Yunsheng Medical are "in the battle" to change their audit institutions
On April 1, Binglun Environment released an announcement that it intends to change its accounting firm.
The reason for the change of the accounting firm of Binglun Environment is: comprehensively considering the company's development strategy, future business expansion and auditing needs and other own development needs, the company plans to appoint Shanghui Accounting Firm (special general partnership) as the company's 2022 annual audit agency, responsible for the company's 2022 audit. Annual financial audit work.
The company has communicated with the previous and previous accounting firms on the change of the accounting firm, and the former and former accounting firms have clearly understood this change and confirmed that there is no objection.
The announcement shows that Binglun Environment's 2022 financial statement audit fees and internal control audit fees total 850,000 yuan (tax included), of which the financial report audit fee is 600,000 yuan and the internal control audit fee is 250,000 yuan.
According to data from Oriental Fortune Choice, since the beginning of 2022, more than 50 A-share listed companies have disclosed announcements that they have changed or plan to change their accounting firms.
Among them, some listed companies, like Binglun Environment, plan to replace the company's 2022 audit agency, but there are also some listed companies that want to replace the company's 2021 audit agency.
Such as ST light one.
In early January this year, ST Koichi issued an announcement on the replacement of the 2021 audit institution.
Regarding the reason for the change, ST Guangyi explained: Based on the actual situation of the company's 2021 annual financial report audit workload and project schedule, Zhonghua Law Firm proposed not to continue to serve as the company's 2021 annual audit agency.
The board of directors of the company agreed to change Joyo & Co. to the audit institution for 2021.
Now, with the disclosure of the annual report imminent, there are still some listed companies "on the spot" for auditing.
In late March this year, Yunsheng Medical issued an announcement on changing its accounting firm.
Yunsheng Medical said: Due to the project and the impact of the epidemic, the schedule of Rongcheng Certified Public Accountants could not meet the disclosure time requirements of the company's 2021 annual report, and could not complete the audit of the company's 2021 annual financial report and internal control audit report.
After full communication and negotiation, it is planned to terminate the audit service in 2021.
"In order not to affect the auditing and disclosure requirements of the annual report, and taking into account the needs of the company's business development, the company plans to appoint Xingchanghua Certified Public Accountants as the company's 2021 financial auditing agency and internal control auditing agency for a one-year term. The change of accounting firm has been communicated with Rongcheng Certified Public Accountants and Xingchanghua Certified Public Accountants in advance, and all parties are aware of this matter and have no objection." Yunsheng Medical said.
ST Furen and others changed the audit "on the spot", and the exchange "hurriedly" sent a letter to inquire
Like Yunsheng Medical, there are still many listed companies that are "on the line" for auditing, such as Foran Energy, ST Furen, *ST Julong, *ST Danbang, etc.
The regulators obviously noticed this, and issued a letter of concern or inquiry "quickly".
Among them, *ST Danbang has changed the 2021 annual audit accountant twice in a short period of time. In the face of the letter of concern from the Shenzhen Stock Exchange, *ST Danbang replied: Shenzhen Xutai Accounting Firm (General Partnership) (referred to as "Xutai Firm") ”) The labor cost and time period required to carry out the audit business have increased. At the same time, the project team members originally planned to be responsible for the company’s audit work in 2021 have resigned, and the Xutai Firm cannot dispatch a sufficient number of professional personnel to be responsible for the company’s annual audit work. , cannot fully guarantee the development of the audit work, and cannot guarantee that the preparation and audit work of the annual report will be completed on schedule.
In order to ensure the smooth progress of the audit work, after comprehensive consideration, the company has reached an agreement with Xutai Firm, and the company plans to re-appoint Shenzhen Guangshen Certified Public Accountants (general partnership) as the company's 2021 annual audit agency.
A reporter from Shell Finance noticed that the scheduled disclosure date of *ST Danbon's 2021 annual report is April 26, 2022. At present, *ST Danbon's stock trading has been issued with delisting risk warnings and other risk warnings. At the same time, *ST Danbon is at risk of being delisted.
There are more risks around ST Furen, such as the risk of sustainable operation, the risk of capital occupation and illegal guarantee, the risk of freezing the controlling shareholder's equity, etc.
In ST Furen's reply to the inquiry letter from the Shanghai Stock Exchange, Shell Finance reporter learned that Beijing Xinghua submitted the "Letter on Dismissal of the Audit Business of the 2021 Annual Report" to ST Furen on November 30, 2021. Xinghua has not yet carried out work on the audit matters in 2021, and ST Fu Jen has not communicated with Beijing Xinghua on the audit matters in 2021.
There are no major differences between ST Fu Jen Catholic and Beijing Xinghua on audit fees, audit opinions, and audit work arrangements; the specific reason why Beijing Xinghua will no longer serve as ST Fu Jen’s annual review agency in 2021 is that Beijing Xinghua’s work arrangements cannot continue to be undertaken.
What are the risks of a listed company changing audits on the spot?
As we all know, the deadline for the disclosure of the 2021 annual report has been less than a month, but some listed companies chose to replace the company's 2021 audit institution at the end of March. The reasons behind this operation are worth investigating, and the risks behind it are also worth paying attention to.
Ding Jihua, an expert from the National Enterprise Compliance Committee of the China Council for the Promotion of International Trade, told the Shell Finance reporter that the annual report is about to be disclosed, and there may be three reasons for the listed company to change its audit "on the spot": First, the listed company itself has financial compliance problems, such as performance fraud, this At that time, the audit intermediary agency that was serving it discovered that the intermediary agency that issued the audit report was unwilling to sign the standard unqualified opinion report, forcing the listed company to replace the new audit agency; second, the listed company’s own compliance problems have always existed. Yes, long-serving auditors have a full understanding of the company's problems.
These companies hope to replace the audit institution and let the new audit institution issue an audit report in a short time. Because the new audit institution has a short time to enter, they cannot fully understand the company's problems, so they can issue an audit report in a short time. Audit report; Third, long-serving audit institutions have recently encountered compliance problems, such as being punished by regulators. In order not to affect their own reputation, listed companies also choose to replace audit service intermediaries.
Wang Yaowu, a financial expert, believes: "Usually the annual report of listed companies needs to be announced before April 30. If the audit institution is changed on the eve of the announcement day, it is often easy to cause the annual report to be difficult to produce."
"If a listed company cannot find a new auditor in a short period of time, the listed company will not be able to release its annual report on time, which will not only attract the attention of regulators, but investors may abandon the listed company. In addition, business partners, banks Everyone may pay attention to the negative news of the listed company, which will have a very large negative impact on the reputation of the listed company, and will also have a very large impact on the business development of the company." Ding Jihua said.
The Beijing News Shell Finance reporter Yan Xia editor Xu Chao proofreads Li Lijun