50-page PPT report Deloitte reveals the industry "hidden rules"?


  China Securities Regulatory Commission: The relevant Securities Regulatory Bureau has been arranged for verification

  Recently, a 50-page "Deloitte report PPT.pdf" file was circulated on the Internet, causing an uproar. Some people even claimed to have dropped a "nuclear bomb" in the audit industry.

  The whistleblower is YW, an employee of the Deloitte Beijing team. The report details 10 incidents, including 7 incidents experienced by the whistleblower and 3 incidents reported on behalf of other former colleagues. All incidents occurred in 2016 and 2017 This mainly includes the unfair treatment of the informant and the audit irregularities discovered during the work process.

The listed companies involved include Sinotrans Shandong Co., Ltd., Beijing Lejin System Integration Co., Ltd., Red Yellow Blue Education, China Boqi Environmental Protection (Holding) Co., Ltd., etc.

The reported violations mainly involve failure to implement audit procedures (flying the plane), being required to use PS and printers to imitate the official seal and financial seal of the client's company, partners accepting large gifts from clients, and rough impairment provision audits.

dispute

  50-page PPT rushed to hot search netizens have different opinions

  After the PPT report material was circulated on the Internet, it quickly rushed into hot searches on Weibo and sparked extensive discussion.

A reporter from the Beijing Youth Daily found through netizens’ comments that everyone had different concerns and varied opinions.

  A large number of netizens praised the level of the PPT, the typesetting is concise and generous, and the organization is clear. It is still Chinese plus English. The professionalism of the reporter is self-evident.

More people respect the integrity and bravery of the whistleblower. "The first feeling is that the heart is a sincere young man, integrity, strict self-requirement, abiding by professional ethics, and an independent capital'person'. Imagine if you were in his place. In that kind of atmosphere, he must follow the trend. I only admire such young people in my heart. With such people, there will be hope for change."

  There are also some netizens who peruse the text of the PPT and think that the facts stated are mixed with subjective feelings, such as emotions such as "I cannot understand and are very angry", "Extremely disrespectful", "Shocking and chilling". It seems that it is not calm and objective enough to talk about it, and it gives people a suspicion of taking the opportunity to vent their anger.

  Some people in the industry believe that the whistleblower letter is a one-sided statement and needs to hear other opinions.

Some problems may be related to professional judgment, not necessarily deliberately concealing facts.

For example, in the "Boqi Environmental Protection" project, "the manager refuses to make provision for impairment", whether or not provision for impairment should be made requires professional judgment, which may vary from person to person.

Therefore, the issue reported by the PPT still needs to be investigated by an authoritative organization to make a conclusion, and now we must maintain the necessary caution.

If the final verification is true, Deloitte may face administrative penalties, related listed companies may be implicated, and the competent authorities may also carry out industry rectification.

But at least judging from the content of the report letter, there is no conclusion that Deloitte assisted customers in fraud.

In contrast, the acceptance of bribes by project partners is even more serious.

Focus

  Is "launching planes" a "hidden rule" in the audit industry?

  Compared with the outside world's appreciation for PPT layout and the courage of reporters, industry insiders have discussed more about the issue of "flying the plane" (the audit procedure has not been implemented, and the audit procedure that they have not done in the paper) is discussed.

Someone said that this report actually took the "hidden rules" of "flying planes" as a substantive violation to the surface. It is really necessary to investigate carefully. Maybe many projects have this problem.

However, sometimes "release the plane" is really compelling, and there are deep reasons behind it.

  "How can I put it, the planes are released until 11 or 12 o'clock every day, and there is no way to do so much work without the planes." Others said: "Why release the planes? Because of the low audit fee, the partners reduce the project team in order to make money. The number of people, the time of the project is compressed, and the draft cannot be completed without letting the plane go. Why is the audit fee low? Enterprises only want a structured report, and no one cares about audit quality. Low-price competition in the industry forces lower audit fees and audit quality. Down, an endless loop."

  There are also people who have been in the industry for many years who believe that the different views on "flying the plane" are actually a conflict of beliefs between young people with ideals and justice and the "old fritters" in the workplace.

Letting every newcomer "off the plane" is tantamount to cultivating batch after batch of morally corrupted accountants.

Many major frauds start with small things.

"At first you will feel flustered when you put a little water on it. Gradually you learn to persuade yourself that it is nothing. You get used to doing this a few more times and your hands don’t shake. Step by step, increase your tolerance for wrong things, and slowly raise the threshold of conscience. , And finally slipped into the big pit without knowing it."

  "The pursuit of fairness, justice, and truth is an eternal and unchanging universal value. Auditing professional ethics is the lowest moral criterion for all audit practitioners. If even the bottom line cannot be held, then our audit work will change. It's worthless." The whistleblower wrote down the original intention of the report in the "apology letter". Some people in the industry praised this and felt that the whistleblower did something they dared not do.

  Response

  Deloitte: The investigation found no evidence affecting the adequacy of the audit

  In response to the reported incident, on the afternoon of the 5th, Deloitte officially responded that it had noticed that several questions about the individual audit projects of Deloitte Beijing in 2016 and 2017 have been circulating on social media platforms.

In fact, the firm has previously received related matters reported by an employee through internal channels, and has conducted a comprehensive investigation on this. No evidence was found to affect the adequacy of Deloitte’s audit work. Therefore, the relevant audit work supports Deloitte’s audit opinion.

Deloitte will investigate any queries received.

  Deloitte also stated that as part of the quality control system, the company encourages employees to speak out through a private line on possible problems.

Deloitte takes all complaints seriously and is investigated by an independent team of experts.

  The statement also stated that it reserves the right to take legal actions for the spread of false information about Deloitte.

  Compared with the whistleblower's Chinese-English, informative, well-documented, 50-page PPT, this statement from Deloitte did not directly answer whether the reported facts were true or not, nor did it respond to any specific details.

A reporter from the Beijing Youth Daily contacted Deloitte Beijing yesterday, hoping to learn more about the situation, but the person concerned said that this statement shall prevail for all at present.

  In the PPT, the informant stated that he had reported Deloitte’s relevant violations to the Securities Regulatory Commission last year.

On February 5, when answering reporters' questions at a regular press conference, Gao Li, the spokesperson of the China Securities Regulatory Commission, said that the China Securities Regulatory Commission has paid attention to this matter and the relevant securities regulatory bureaus have also received relevant reports.

The China Securities Regulatory Commission has arranged for the relevant securities regulatory bureau to verify the reported matter, and at the same time, it also requires the accounting firm to conduct an internal self-inspection, and follow-up matters are also being further followed up.

This group of articles / our reporter Cheng Jie