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china fund news reporter qiu dekun

on the evening of september 25, the china securities regulatory commission’s official website released an administrative penalty decision showing that: suya jincheng certified public accountants (special general partnership) (hereinafter referred to as suya jincheng)it was ordered to make corrections, fined and confiscated a total of 19.5 million yuan, and suspended from securities business for 6 months.

suspension from securities business for six months is called a "qualification penalty," and suya jincheng is the fourth accounting firm to be subject to a "qualification penalty" this year.

the china securities regulatory commission pointed out that suya jincheng and its related personnel in providing audit services for hongtu hi-tech's financial reports from 2017 to 2021, the company failed to perform its duties diligently and the audit reports it issued contained false statements.

audit report of hongtu hi-tech co., ltd.

there are false records

the china securities regulatory commission pointed out that hongtu hi-tech's annual reports from 2017 to 2021, there are false records such as inflated revenue and profits and unrecorded liabilities, and suya jincheng provided audit services for hongtu hi-tech’s annual reports from 2017 to 2021.

specifically, suya jincheng issued a standard unqualified opinion on hongtu hi-tech's 2017 financial report, an unqualified opinion with an emphasis of matter paragraph on the 2018, 2019 and 2020 financial reports, and a qualified opinion on the 2021 financial report regarding the future collectibility of accounts receivable and prepaid expenses.

the china securities regulatory commission pointed out that when suya jincheng provided audit services to hongtu hi-tech in the above-mentioned year, it failed to fully implement risk assessment audit procedures, failed to maintain due professional prudence and professional skepticism, and the confirmation procedures for accounts receivable, other receivables, and prepaid expenses had major defects, as well as the bank confirmation procedures had major defects.

at the same time, when suya jincheng discovered that the book records of hongtu hi-tech's liabilities were inconsistent with the credit reports, it did not find out the reasons, and did not require hongtu hi-tech to make accounting adjustments, nor did it further expand the audit procedures to assess whether hongtu hi-tech had any material risk of misstatement.

the china securities regulatory commission believes that the above-mentioned actions of suya jincheng and its related personnel constitute "securities service institutions fail to perform their duties diligently and the documents they produce and issue contain false records" as stated in the securities law revised in 2005 and the securities law of 2019.

or face customers "changing offices"

suya jincheng is the fourth accounting firm to be "qualified" this year.

the other three accounting firms that were "qualified" this year are dahua accounting firm (special general partnership), tianzhi international accounting firm (special general partnership), and pricewaterhousecoopers zhongtian accounting firm (special general partnership).

looking back, the three accounting firms that were penalized for their qualifications have all seen their clients switch firms in droves.

industry insiders pointed out that after suya jincheng was "qualified", it may also face the problem of concentrated loss of customers. this is mainly because once an accounting firm is "qualified", its clients' related capital operations will be restricted.

the official website shows that since 2003, suya jincheng has been ranked among the top 30 in the comprehensive evaluation ranking of 100 accounting firms in china announced by the chinese institute of certified public accountants.

public information shows that the total audited revenue of suya jincheng in 2023 was 436 million yuan, of which securities business revenue was 143 million yuan. the number of listed company audit clients reached 37, with a total audit fee of 78.8661 million yuan.