BEIJING, Jan.10(Reporter: Bai Zhenzhi Peng Xinyun) Recently, the Ministry of Finance held a video conference on the audit and supervision of the annual report of enterprises to inform the recent two years of the work of accounting supervision and inspection and the main problems found. The head of the supervision and evaluation bureau of the Ministry of Finance said in an interview with the people's net powerful country forum that the impact of the \"three phases of superposition\" continued to deepen, the economic downward pressure increased, and the motivation for corporate fraud increased. Financial departments at all levels and accounting services need to work together to do a good job in the audit of the annual report of 2019 to ensure the true integrity of the accounting information of the enterprise. We will focus on the inspection and frequency of accounting firms with large business size, high practicing risk and continuous administrative penalties, and will crack down on such issues as \"changing vest\" and \"selling report \".
The relevant responsible person of the Bureau of Supervision and Evaluation of the Ministry of Finance: since 2018, the Bureau of Supervision and Evaluation has organized local supervision bureaus and financial departments at all levels to continuously increase the work of accounting supervision and rectify the order of the industry around the improvement of the quality of accounting information and the practice of intermediary organizations. First, focus on social and livelihood pain points, in-depth medical industry accounting information quality inspection. The Ministry of Finance, together with the State Health Insurance Bureau, selected 77 pharmaceutical enterprises in accordance with the requirements of \"double random, one open \", and conducted a penetrating inspection of the whole process of drug production, circulation, use and settlement. Second, focus on the practice of risk focus, do a good job in accounting firm practice quality inspection. Continue to promote the round of securities qualification accounting firms, following the completion of a full round of 40 securities qualification accounting firms in 2018,2019 to start the second round of securities qualification accounting firms, select 4 accounting firms to carry out practice quality inspection. In view of the pre-disclosure of large goodwill impairment by many listed companies in early 2019, the local regulatory bureaus are organized to track the audit of the goodwill impairment of listed companies in the whole process, and select 5 listed companies to carry out special inspections. The third is to focus on the industry development blocking point, continuous management of non-certificate accounting firms in the practice of outstanding problems. In recent years, some non-securities accounting firms have excessively pursued economic interests, relaxed the quality management of practice, and damaged the image of fair and honest in the industry. The Bureau of Supervision and Evaluation attached great importance to it, and for several years in a row, it organized local financial departments to carry out special rectification work, effectively addressed the problems of hanging-up practice, selling reports, and low-price competition, and achieved good results. Fourth, focus on the \"Belt and Road\" initiative blueprint, constantly promote cross-border accounting audit regulatory cooperation. Since 2018, the Ministry of Finance has signed audit regulatory cooperation documents with regulators in Russia, Hong Kong and other countries and regions. In 2019, the European Commission was promoted to adopt a resolution on the appropriateness of Chinese regulators in the field of statutory audit regulation. A number of overseas listed companies and relevant accounting firms in the Mainland are subject to special inspection according to the clues handed over by overseas regulators.
According to statistics, in 2018, financial departments at all levels inspected 1080 accounting firms and 18476 enterprises and institutions. There are 88 accounting firms, of which 21 are suspended from practicing and 3 are revoked;140 are penalized, of which 53 are suspended and 5 are revoked. In 2019, financial departments at all levels inspected 1209 accounting firms and 23922 enterprises and institutions, the inspection work basically ended, and the follow-up processing is under way.
Head of the Bureau of Supervision and Evaluation of the Ministry of Finance: In recent years, the risk awareness of accounting firms has increased, and the level of practice has improved. But the inspection also found that some deep-seated problems in the CPA industry have not been effectively managed, which seriously affects the quality of practice. First, the internal governance of accounting firms is not perfect. Some accounting firms do large-scale, a large number of merger audit team, but in the process of rapid merger, integrated management has not kept up, big and not strong, is still loose \"franchise store\" mode. Second, failure to adhere to independence. Some accounting firms have turned a blind eye to the signs of accounting fraud that they have been concerned about for reasons such as maintaining customer relations and safeguarding business income. Third, business management is not strict. Some accounting firms have not established a negative list of audit clients, some accounting firms do not implement the multi-level audit system in place, some accounting firms know that there are huge risks in business, still undertake and issue standard unqualified opinion audit report. Fourth, the implementation of audit procedures is not in place. Some accounting firms'audit procedure design is not scientific, the execution is not in place, and even the audit procedure is carried out selectively for the expected audit opinion, which leads to a great discount on the audit effect.
In addition, some non-securities certified public accounting firms registered practice, sales report phenomenon is more serious. If the Ministry of Finance of a certain province carries out the work of \"clearing the name \",666 certified public accountants have been cleared and cleared for practice in one year; the proportion of reports sold on individual affairs exceeds 70% of the total amount reported by the Institute; and the shareholders (or partners) of some accounting firms, after being punished by administrative treatment, continue\" listing business \"through the means of new offices after cancellation.
The head of the bureau of supervision and evaluation of the ministry of finance:\" strict management is love \", especially in the current environment, severe punishment of a small number of disturbing market order, strong social response to the black sheep, is the best guarantee of industry credibility. Next, the Ministry of Finance will strictly enforce the law, deal with the punishment seriously, and make the result of the punishment public according to the regulations.
The Central Economic Work Conference pointed out that China is in the key period of transforming the mode of development, optimizing the economic structure and transforming the power of growth. Under this kind of background, the enterprise performance pressure increases, the fraud motive rises. How will the Ministry of Finance do a good job in auditing the annual report of 2019?
The responsible person of the Bureau of Supervision and Evaluation of the Ministry of Finance: accounting firms should pay close attention to the audit of the annual report of 2019, actively cooperate with the financial departments at all levels and the organizations at all levels to do a good job of accounting supervision, and effectively improve the quality of accounting information and the practice quality of accounting firms.
Accounting firms should deeply reflect on the problems existing in the practice quality in recent years, further strengthen the risk awareness and improve the integrated management. In particular, it is necessary to strengthen the management of the recently absorbed and merged branches and teams, establish and improve the internal quality control mechanism, and improve the quality of audit and service level. We will step up the auditing of double-high listed companies, local financial institutions, local financing platforms and state-owned enterprises. For listed companies with high deposits and loans, we should focus on the authenticity of financial assets such as monetary funds and the operating cash flow of enterprises, and intensify the auditing of bank deposits, operating income costs and large amounts of current payments, especially related party transactions and overseas transactions; focus on reducing the size of assets, concealing non-performing assets and inflating profits for local financial institutions, and intensify the auditing of the five-level classification of assets, the scope of consolidated statements and major transactions at the end of the period; focus on the local financing platform, focusing on the issue of concealing external arrears and intensifying the audit of the integrity of corresponding payments; focus on the issue of state-owned enterprises, focusing on the issue of increasing the scale of revenue and profits, and intensifying the auditing of non-material trade, carry-over of end-end business, the scope of consolidated statements, major reorganization of assets and the disposal of major assets.
The local supervisory bureaus of the Ministry of Finance should take the discovery, prevention and resolution of potential risks and the promotion of the healthy development of the industry as their work objectives, scientifically grasp the audit and accounting responsibilities, and do a good job of supervision and control. Local financial departments (bureaux) should strengthen cooperation with local accounting associations and strengthen supervision over small and medium-sized accounting firms in light of their local characteristics. Highlight the key points of supervision, continue to carry out the practice of listing and selling reports on the special treatment, rectify and standardize the market order, and enhance the social credibility of the industry.