Warning letter received by Zhitong accountant 6 cases of irregularities in yaxun online IPO audit project

According to the decision on administrative supervision measures (hjzj [2020] No. 153 and 154) published on the website of Shanghai regulatory bureau of China Securities Regulatory Commission, the Shanghai regulatory bureau found that Zhitong accounting firm (special general partnership) and Huang Yinqiang and Yu Dao, as signed certified public accountants, were executing Xiamen yaxun network Co., Ltd. (hereinafter referred to as “yaxun network”) after investigation“ There are the following problems in the process of IPO audit project and internal control assurance project: < / P > < p > (1) the internal control defects related to borrowing funds of senior executives and employees are not properly identified. During the audit, Zhitong accounting firm, Huang Yinqiang and Yu Daoqian have paid attention to the situation that yaxun network provides house purchase loan for senior executives and employees beyond the company’s normal business scope, senior managers’ excessive advance of year-end bonus, employees’ overdue borrowing of reserve fund, etc. Zhitong accounting firm, Huang Yinqiang and Yu Daoqian did not understand the relevant internal control system and did not evaluate the relevant internal control system design And the effectiveness of operation, and the relevant internal control defects were not identified. < p > < p > the above behaviors do not conform to Articles 15 and 16 of auditing standards for Chinese certified public accountants No. 1211 – identifying and evaluating the risk of material misstatement through understanding the auditee and its environment (2010), and articles 14 and 34 of the auditing standards for Chinese certified public accountants No. 3101 – assurance services other than audit or review of historical financial information (2006) Yes. (2) the internal control defects related to the delivery process of finished products are not properly identified. The audit draft describes the delivery process of finished products. The delivery personnel prepare the sales delivery order and deliver it to the logistics company for transportation. The actual process is that the delivery personnel make up the sales delivery order after the goods are delivered. Zhitong certified public accountants, Huang Yinqiang and Yu Dao did not accurately understand the finished goods delivery process, did not identify the internal control operation defects that the products had been delivered but did not enter the delivery order, and did not find that the delivery time of some goods in 2017 was later than the delivery time. < p > < p > the above behaviors are not in accordance with the provisions of Article 8 (1) of the auditing standards for Chinese certified public accountants No. 1231 – Countermeasures for the assessed risk of material misstatement (2010) and Articles 34 and 50 of the auditing standards for Chinese certified public accountants No. 3101 – assurance services other than audit or review of historical financial information (2006). < / P > < p > (3) the impact of identified internal control defects on the opinions of internal control assurance report was not properly evaluated. Zhitong certified public accountants, Huang Yinqiang and Yu Daoqian identified two internal control defects in the audit manuscript: the provision for inventory falling price has not been reviewed and the cost accounting of main business has not been reviewed. However, the impact of the above two internal control defects on the opinions of the internal control assurance report has not been considered. The above behaviors do not conform to the provisions of Article 34 and Article 50 of the auditing standards for Chinese certified public accountants No. 3101 – assurance services other than audit or review of historical financial information (2006). In addition, Zhitong accounting firm, Huang Yinqiang and Yu Daoqian have not actually inspected the samples selected for the delivery control test of finished products, and the lack of internal control assurance business plan, which does not conform to the provisions of Articles 11 and 34 of the auditing standards for Chinese certified public accountants No. 3101 – assurance services other than the audit or review of historical financial information (2006). < / P > < p > first, according to the relevant notes of the company’s financial statements, the company’s directors, managers, chief financial officer and Secretary of the board of directors constitute the company’s related parties, but the company did not disclose the amount of capital provided to key management personnel from 2015 to 2017 in accordance with Article 10 of the accounting standards for Business Enterprises No. 36 – disclosure of related parties (CK [2006] No. 3) 。 < / P > < p > the second is that the cash inflow and outflow of funds provided by the company to senior executives and employees from 2015 to 2018 are presented in the cash flow statement according to the net amount, but not in accordance with the provisions of Article 5 of the accounting standards for Business Enterprises No. 31 – cash flow statement (CK [2006] No. 3). < p > < p > Zhitong accounting firm, Huang Yinqiang and Yu Daoqian did not properly evaluate the disclosure and presentation of the above financial statements of the company, which is inconsistent with Item 1 of Article 26 of auditing standards for Chinese certified public accountants No. 1323 – related parties (2010) and No. 1501 of auditing standards for Chinese Certified Public Accountants – forming audit opinions and issuing audit reports on financial statements (2016) No. 10 Article 3 and item 5 of Article 14. (2) part of audit response procedures for revenue recognition of key audit items have not been implemented. Zhitong accounting firm, Huang Yinqiang and Yu Daoqian regard revenue recognition as a key audit matter, and disclose the internal control related to revenue recognition that has been evaluated and tested in the audit report. The software and service income of each period in the report exceeds the importance level of actual implementation in the current period. However, the internal control related to software and service revenue is not evaluated and tested in the audit manuscript. < p > < p > the above behaviors do not comply with the provisions of Article 15 and Article 16 of the auditing standards for Chinese certified public accountants No. 1211 – identifying and assessing the risk of material misstatement through understanding the auditee and its environment (2010), and Article 8 (1) of the auditing standards for certified Public Accountants of China No. 1231 – Countermeasures for the risk of material misstatement assessed (2010). (3) no effective communication with the former CPA. There is no audit procedure for communication with the former CPA in the audit draft, which is not in line with the provisions of Article 7 of the auditing standards for Certified Public Accountants of China No. 1153 – communication between the former certified public accountant and the later certified public accountant (2010). In addition, Zhitong accounting firm, Huang Yinqiang and Yu Daoqian used the inventory aging table provided by the company in the audit process of inventory falling price preparation, but did not implement audit procedures to evaluate the reliability of the inventory aging table, which did not comply with the provisions of Article 13 of the auditing standards for certified public accountants No. 1301 – audit evidence (2016). < p > < p > the above behaviors of Zhitong certified public accountants do not comply with the relevant requirements of the practicing standards for Certified Public Accountants of China, and violate the provisions of the second paragraph of Article 3 of the administrative measures for securities issuance and underwriting (Order No. 144 of the CSRC). In accordance with the provisions of Article 38 of the measures for the administration of securities issuance and underwriting (Order No. 144 of the CSRC), it is hereby decided to take administrative supervision measures to issue warning letters to grant Tong accounting firm. The above behaviors of Huang Yinqiang and Yu Daoqian do not comply with the relevant requirements of the standards for Certified Public Accountants of China, and violate the provisions of paragraph 2 of Article 3 of the administrative measures for securities issuance and underwriting (Order No. 144 of the CSRC). In accordance with the provisions of Article 38 of the measures for the administration of securities issuance and underwriting (Order No. 144 of the CSRC), it is hereby decided to take administrative supervision measures to issue warning letters to Huang Yinqiang and Yu Daoqian. Xiamen yaxun Network Co., Ltd. was established in August 1998, which is controlled by the 30th Research Institute of China Electronics Technology Group Corporation. With a registered capital of 68 million yuan, the company is mainly committed to the production and sales of satellite navigation and positioning, vehicle terminal and service center software, as well as mobile location information (LBS) operation services supported by terminal products; the company is positioned as “solution and operation service provider of integrated software and hardware for mobile location application” and “cross integration technology of mobile data communication and satellite navigation and positioning” Technology developers “. Zhitong is one of the earliest accounting firms in China, which was established in 1981. Headquartered in Beijing, Grant Thornton is the only member office of Grant Thornton International Ltd (gtil) in China, and its English name is Grant Thornton. Including the Hong Kong Special Administrative Region, Grant Thornton has 28 branches nationwide, more than 270 partners and more than 6000 employees. Among them, there are more than 1200 certified public accountants. Grant Thornton is one of the first accounting firms to obtain the qualification to engage in Securities and futures related business, the first batch to be approved to engage in the audit business of super large state-owned enterprises and the first batch to obtain the qualification of financial audit; it is also one of the first batch of mainland firms to obtain the audit qualification of H-share enterprises, and is registered in PCAOB of the United States. Huang Yinqiang, the two certified public accountants involved, is the partner of Xiamen Branch of Zhitong accounting firm, and Yu Daoqian is the project manager of Xiamen Branch of Zhitong accounting firm. The relevant information is as follows: < / P > < p > Article 3 of the administrative measures for securities issuance and underwriting (Order No. 144 of the CSRC) stipulates that the CSRC shall supervise and manage the issuance and underwriting of securities in accordance with the law 。 Stock exchanges, securities registration and settlement institutions and China Securities Association shall formulate relevant business rules (hereinafter referred to as relevant rules) to regulate the issuance and underwriting of securities. When underwriting securities, a securities company shall formulate strict risk management system and internal control system in accordance with these measures and relevant provisions of the CSRC on risk control and internal control, strengthen the management of pricing and placing process, and implement the underwriting responsibility. < / P > < p > securities service institutions and personnel that issue relevant documents for securities issuance shall strictly perform their legal duties in accordance with the recognized business standards and ethics of the industry, and shall be responsible for the authenticity, accuracy and completeness of the documents issued. < p > < p > < p > Article 38 of the measures for the administration of securities issuance and underwriting (Order No. 144 of the Securities Regulatory Commission) stipulates that if a securities company underwrites securities that are publicly issued without approval, it shall be punished in accordance with the provisions of article 190 of the securities law. If a securities company underwrites securities under the circumstances mentioned in the preceding paragraph, the CSRC may take the regulatory measures of not accepting the relevant documents of its securities underwriting business for 12 to 36 months. < p > < p > after investigation, we found that there were the following problems in the process of executing the IPO audit project and internal control assurance project of Xiamen yaxun Network Co., Ltd. (hereinafter referred to as “yasun network” or “the company”): < / P > < p > (1) the internal control defects related to the borrowing of funds by senior executives and employees were not properly identified. During your audit, you have paid attention to the situation that yaxun network has provided loans for senior executives and employees to purchase houses beyond the normal business scope of the company, the senior managers have paid in excess of the year-end bonus, and the employees have borrowed the reserve fund over time. You have not understood the relevant internal control system, evaluated the effectiveness of the design and operation of the relevant internal control system, and did not identify the relevant internal control defects. < p > < p > the above behaviors do not conform to Articles 15 and 16 of auditing standards for Chinese certified public accountants No. 1211 – identifying and evaluating the risk of material misstatement through understanding the auditee and its environment (2010), and articles 14 and 34 of the auditing standards for Chinese certified public accountants No. 3101 – assurance services other than audit or review of historical financial information (2006) Yes. (2) the internal control defects related to the delivery process of finished products are not properly identified. The audit draft describes the delivery process of finished products. The delivery personnel prepare the sales delivery order and deliver it to the logistics company for transportation. The actual process is that the delivery personnel make up the sales delivery order after the goods are delivered. You did not accurately understand the finished goods delivery process, did not identify the internal control operation defects that the products had been delivered but did not enter the delivery order, and did not find that the delivery time of some goods in 2017 was later than the delivery time. < / P > < p > the above behaviors do not conform to Article 8 (1) of auditing standards for Certified Public Accountants of China No. 1231 – measures to be taken for the risk of material misstatement assessed (2010) and the auditing standards for Chinese certified public accountants No. 3101 – calendar