Shanghai Stock Exchange Accounting Supervision Trends 2022 Issue 1 (Total 7th Issue)
1. Shanghai Stock Exchange Accounting Supervision Newsletter
(1) Financial delisting-related annual report audit risk tips
Financial delisting indicators mainly include business operations The income is less than 100 million yuan and the net profit before and after non-deduction is negative (hereinafter referred to as "revenue + non-deduction"), the net assets are negative, the audit opinion is not unqualified and other indicators. Through the preliminary investigation of the Shanghai Stock Exchange regulatory department, the main situations in which listed companies avoid financial delisting indicators are now sorted out, and annual audit accountants are reminded to focus on the following matters during the audit process of the 2021 annual report.
First, focus on avoiding the "revenue + non-deduction" indicator. Under this indicator, operating income needs to deduct income that is unrelated to the main business and does not have commercial substance. To sort out the common means of avoiding the "revenue + deduction" indicator, they mainly include the following methods:
first, to increase revenue through new business during the reporting period, year-end surprise sales, etc. . For example, some companies will add new property management businesses in the fourth quarter of 2021 and have significant dependence on related party customers. Second, increase revenue through sudden expansion of stagnant or smaller businesses in previous years. For example, if a certain company unexpectedly expands the non-performing asset disposal business that has been added in recent years, whether the relevant business income needs to be deducted should be judged whether it has a stable business model. Third, long-term reliance on investment income to maintain positive net profits eliminates the need to consider whether income is less than 100 million yuan. The main business of some listed companies has shrunk, and they are typical shell companies , but they rely on foreign investment to obtain investment income for a long time to ensure positive net profits, thereby avoiding financial delisting; some companies also avoid accruing , less provision for asset impairment is made to maintain a positive net profit. For such companies, annual audit accountants are reminded to strictly follow the "Shanghai Stock Exchange Self-Regulatory Supervision Guidelines for Listed Companies No. 2—Financial Delisting Indicators: Operating Income Deductions" and "Self-Regulatory Supervision Guidelines for Science and Technology Innovation Board Listed Companies No. 9—Financial Delisting Guidelines" Delisting Indicators: Operating Income Deduction" relevant requirements, verify the compliance, authenticity, accuracy and completeness of the company's operating income recognition, as well as the authenticity, accuracy and completeness of net profit and non-recurring gains and losses; here Basically, focus on verifying whether the company's operating income deductions are compliant, accurate, and complete.
The second is to focus on avoiding the situation of continued negative net assets through debt restructuring and divesting loss-making subsidiaries. Early regulatory attention paid attention to the fact that some companies unexpectedly signed debt restructuring agreements to reverse the bad debt provisions for accounts receivable that had been fully accrued in the previous period, or to achieve positive net assets through the sale of loss-making subsidiaries. For such companies, the annual audit accountants are reminded to focus on whether the confirmation time of debt restructuring income, the time when the subsidiary is released, whether the transaction price is fair, and whether the transaction arrangement with other later transactions constitutes a package deal.
The third is to pay attention to the situation of circumventing the delisting clause of the audit opinion. Under the new delisting regulations, companies subject to delisting risk warnings will be terminated from listing if they are issued with a reserved opinion, inability to express an opinion, or a negative opinion in the second fiscal year. For such companies, annual audit accountants are reminded to pay close attention to the progress of non-standard matters in the previous period, the impact of related matters on the opening numbers of the current period and the current audit opinions, and strictly follow the "Guidelines for the Application of Regulatory Rules - Audit Category No. 1" Provide for information disclosure.
(2) Annual report audit risk reminder in the case of temporary exchange
As of February 17, 2022, Shanghai Stock Exchange A total of 134 listed companies have changed their 2021 annual report audit institutions, of which 45 have temporarily changed after December 2021 Audit institutions (including 40 main board companies and 5 science and technology innovation board companies) account for 33.6% of the total number of exchange companies. The risk characteristics of most temporary stock exchange companies have been relatively clear, mainly focusing on four levels: operating risk, corporate governance risk, performance authenticity risk and delisting risk.
For audit institutions that temporarily undertake new business, the annual audit accountants are reminded to strengthen communication with the previous certified public accountants during the audit process of the 2021 annual report. The company should fully identify the company's risks, reasonably formulate an audit plan , implement targeted audit procedures, and issue appropriate audit opinions.
(3) Notice on Establishing a Two-way Liaison Mechanism with Audit Institutions
In order to effectively carry out supervision and service work and further smoothen the two-way communication channels with accounting firms, the Shanghai Stock Exchange has recently improved its daily liaison mechanism with accounting firms, The Shanghai Stock Exchange contact person has been designated for the 42 accounting firms engaged in securities business in the Shanghai Stock Exchange. They are responsible for daily communication with the accounting firms, strengthening two-way communication, effectively providing regulatory services, and jointly promoting the high-quality development of the capital market. In the early stage of
, each accounting firm has reported its contact persons to the Stock Exchange. Under the new liaison mechanism, the liaison person of the Shanghai Stock Exchange will maintain necessary daily communication with the contact person designated by the accounting firm. While doing a good job in supervising the audit services of securities listed on the Shanghai Stock Exchange, it will also strengthen daily services to the accounting firm, including accounting audits. consultation and answers, business training, etc.; at the same time, it summarizes and sorts out common issues related to audit practice and capital market accounting supervision, timely conveys supervision trends by publishing the Shanghai Stock Exchange’s accounting supervision trends and actively provides technical support, and jointly promotes the construction of a healthy industry ecosystem.
2. Typical case studies
(1) Revenue series
Question 1 [Accounting treatment of revenue recognition under the seller’s credit model]: At what point in time should the company recognize product sales revenue ?
Case: Company A is a listed company, mainly engaged in the production and sales of material cutting equipment, and Company B is a customer of Company A. Due to the high initial purchase price of the cutting equipment, Company B has certain difficulties in paying the full amount when the equipment is handed over. In order to reduce the capital burden of Company B and ensure that Company A can achieve timely repayment, a financial lease sales model with a repurchase obligation was adopted.
Company A signed a financial leasing contract with a repurchase obligation with Company B and financial leasing company after fully considering the risks of external guarantees. The contract stipulates that the financial leasing company will purchase cutting equipment from Company A and pay the price, and then Company B will lease the equipment to the financial leasing company. This lease meets the conditions of financial leasing. If Company B fails to pay the rent to the financial leasing company on time, A will The company assumes repurchase obligations to the financial leasing company under certain conditions, and inherits all the rights and interests of the financial leasing company in the lease contract of Company B.
Under the above business model, at what point should Company A recognize the sales revenue of cutting equipment?
Analysis: According to Article 5 of "Accounting Standards for Business Enterprises No. 14 - Revenue" (revised in 2017), when the relationship between the company and its customers When the contract meets the five conditions stipulated in the standards at the same time, the enterprise shall recognize revenue when the customer obtains control of the relevant goods. Under the above business model, although the financial leasing company is the purchaser of cutting equipment in legal form, in the essence of the transaction, the financial leasing company is only a fund provider, providing financing services to Company B. Company B is the real owner of the cutting equipment. The purchaser and user are Company A’s customers. Company A needs to first determine whether the contract signed with Company B and the financial leasing company simultaneously meets the five conditions stipulated in Article 5 of the Revenue Standards. One of the conditions is whether the consideration to which Company A is entitled for the transfer of cutting equipment is likely to be recovered. Under the above business model, if Company B fails to pay rent to the financial leasing company on time, Company A will bear the repurchase obligation under certain conditions. That is, whether the consideration that Company A is entitled to obtain is likely to be recovered depends on whether Company B has the ability and intention to do so. Pay the lease payment to the financial leasing company as agreed in the contract. If Company A believes that the consideration it is entitled to receive for transferring the cutting equipment is likely to be recovered, and other conditions specified in Article 5 of the revenue standard are met at the same time, revenue should be recognized when the customer obtains control of the cutting equipment.If Company A believes that the consideration it is entitled to receive does not meet the conditions of probable recovery, then it can only recognize the consideration received as an asset when it no longer has the remaining obligation to transfer the goods to the customer and the consideration does not need to be returned. income. If Company A's repurchase obligation under certain conditions belongs to a financial guarantee contract, it will be accounted for in accordance with the Financial Instruments Standards.
In new business and new customer scenarios, companies usually lack sufficient historical experience and data when judging whether the contract with the customer satisfies the condition that the consideration that the company is entitled to obtain due to the transfer of goods to the customer is likely to be recovered. However, you should still collect relevant information as much as possible, make careful judgments, and continue to pay attention to and collect credit risk information related to new businesses and new customers. On the contract start date, even if the company believes that the contract meets the five conditions stipulated in Article 5 of the Revenue Standards, if during the subsequent period of performance, there are signs that the customer's credit risk has increased significantly, the company needs to evaluate its transfer of remaining goods to the customer in the future. As for whether the consideration that is entitled to be recovered is likely to be recovered, if the conditions for being likely to be recovered cannot be met, the contract will no longer meet the five conditions stipulated in Article 5 of the Revenue Standards from then on, and revenue shall be stopped from being recognized. However, there should be no adjustment to revenue recognized prior to this date.
Question 2 [Income recognition issue in the case of supplementary written contract]: In the case of first shipping and then signing the written contract, can the income be recognized when the customer acceptance/signature is obtained?
Case: Company A is a listed company, and its customers are mostly government departments and large state-owned enterprises. Some projects have tight deadlines and the client's internal contract approval process is lengthy. In order to seize the market, for some customers with good reputation and long-term cooperation, and on the premise of judging that the risks are controllable, the company will produce and organize shipments according to the customer's intended orders. After the customer's internal process is approved, both parties will sign a formal written document. contract.
In the case of delivery first and then signing the contract, after receiving the customer's demand for purchasing equipment, Company A's business personnel usually negotiate with the customer to determine the contract details through face-to-face communication, telephone contact, WeChat, email, etc. Company A believes that there is no difference between the business communication records and the terms of the formal contract and is also legally binding. It recognizes revenue based on email records, oral agreements and customer acceptance/signature documents obtained. Does Company A comply with the standards when it recognizes revenue before signing a formal written contract?
analysis: The meaning of a contract under the new revenue standard emphasizes that both parties have established legally binding enforceable rights and obligations, so it is not limited to the specific form of the contract. In addition to written form, it also includes oral forms and other forms (such as Implicit in business practices or past practices of the enterprise, etc.). The written terms of the contract may only be format terms, and you may also need to email or other supplementary agreements with the customer, and understand oral communication, WeChat, SMS communication records, and normal business practices to identify all terms of the contract. Business communication records such as WeChat records, email exchanges between
A Company and customers, and shipping application forms provided by customers, if they contain the main elements of the contract, the two parties have long-term cooperation and the situation complies with business practices, even if a formal written agreement has not been signed yet , it can also be evaluated based on business communication records whether a contract already exists and whether the two parties have essentially established a legally binding contractual relationship. If the business communication records meet the five conditions stipulated in Article 5 of the Revenue Standards at the same time, the contract will be established and revenue will be recognized when the customer obtains control of the relevant goods. Since A Company's revenue recognition time is earlier than the date of signing the written contract, Company A should improve relevant internal controls, properly preserve internal documents and external communication records, and further standardize the time and method of contract signing.
Question 3 [Accounting treatment of transportation expenses under the new revenue standard]: Should the adjustment of transportation expense presentation items be treated as error correction or accounting policy change ?
Case: On November 2, 2021, the Accounting Department of the Ministry of Finance issued a question and answer on the implementation of the new revenue standard: According to the relevant provisions of the "Accounting Standards for Business Enterprises No. 14 - Revenue" (Finance [2017] No. 22), under normal circumstances, , the transportation activities that occur for the performance of the customer contract before the control of the enterprise's goods or services are transferred to the customer do not constitute a single performance obligation. The relevant transportation costs should be regarded as contract performance costs and amortized on the same basis as the recognition of goods or services revenue. Included in current profit and loss. The contract performance costs should be carried forward and included in the " main business cost " or " other business costs " account when the goods or service revenue is recognized, and listed in the "operating cost" item of the income statement. On November 24, 2021, the "Guidelines on the Application of Regulatory Rules-Accounting No. 2" issued by the China Securities Regulatory Commission also once again emphasized the accounting treatment of transportation costs.
A Company will implement the new revenue standard starting from January 1, 2020. In 2020, Company A incurred transportation expenses of RMB 12 million to fulfill customer contracts, which were included in sales expenses. According to the above-mentioned documents, Company A plans to include relevant transportation fees in 2021 into operating costs. When Company A prepares its 2021 annual report, can this adjustment be used as an accounting policy change?
analysis: There are currently different understandings in practice as to whether the adjustment to the presentation of transportation charges when preparing the 2021 annual report is a correction of accounting errors or a change in accounting policies. Some companies believe that including transportation costs into sales expenses when preparing the 2020 annual report is in compliance with the accounting subjects and main accounting treatment provisions of the appendix of the "Accounting Standards for Business Enterprises - Application Guide" (2006). When preparing the 2021 annual report, it shall be based on the financial The Ministry of Finance's announcement in November 2021 to implement Q&A changes to the presentation items of transportation expenses can be regarded as a change in accounting policy. This view has certain rationality. Company A adjusts the accounting subjects for transportation fees according to the Q&A implemented by the Ministry of Finance, which can be treated as a change in accounting policy.
(2) Long-term equity investment and consolidated financial statement series
Question 4 [Accounting treatment of equity investments with resale rights]: For equity investments that have a significant impact and come with resale rights, should they be recognized as long-term equity investments or Financial assets at fair value through profit or loss ?
Case: Company A plans to invest in Company B with its own funds and acquire 16% of the equity of Company B. After completing the capital increase, Company A will become the second largest shareholder of Company B. According to the equity investment agreement, Company A has the right to dispatch a director to Company B after completing the capital increase. In addition to the rights of ordinary shareholders, Company A also enjoys the right to sell back. If Company B occurs a specific sell-back event (such as within five years) Company B does not have an IPO), Company A can exercise the right to sell back the equity to Company B at the investment cost plus the agreed rate of return. Company A's intention to invest in Company B's equity is mainly capital integration and business synergy, including acquiring new user scenarios, in-depth cooperation to enhance brand value, etc. Should Company A's investment in Company B be recognized as a long-term equity investment or a financial asset measured at fair value through profit or loss for the current period?
analysis: According to the relevant provisions of the China Securities Regulatory Commission's "Guidelines for the Application of Regulatory Rules - Accounting No. 1" on equity investments with sell-back clauses, when a company determines whether an investment is suitable for long-term equity investment or the use of financial instruments, it should first determine Whether the investor exercises control, joint control or significant influence over the investee. If the investor has significant influence on the investee, the investor should also follow the principle of substance over form to determine whether the investment is an equity investment. If it is an equity investment, it should be classified as a long-term equity investment because it has a significant impact on the investee, and the put-back right is regarded as an embedded derivative and must be separated. If it is not an equity investment, the investment should be accounted for as a financial instrument as a whole.
When determining whether it has a significant impact on the invested unit, the enterprise should comprehensively analyze its own intention to hold the relevant investment and management model, as well as its actual participation in management. If the company plans to establish a long-term business partnership with the investee and increase corporate value through strategic integration and synergy, it indicates that the company has the motivation to exert significant influence by substantively participating in the investee's business decisions. If the purpose of the investor's holding is to transfer the equity to obtain capital appreciation income, there is a relatively clear holding period or investment exit strategy , and it is a financial investment, the enterprise generally has no intention to participate in the financial operation decisions of the invested unit. exert significant influence. Regarding whether an investment is an equity investment, it should be based on the principle of substance over form , and analyze whether the risks and rewards borne by the investor are substantially the same as those of ordinary shareholders. If they are the same, it is an equity investment, otherwise it is not. Equity investment.
In this case, Company A has the right to dispatch a director to Company B, who has the same voting rights, dividend rights and net asset distribution rights as other ordinary shareholders, thus having a significant impact on Company B's production and operation decisions. . At the same time, Company A also has the right to sell back the equity investment. The company should consider whether the right to sell back is a protective right or a substantive right based on the intention and management model of the equity investment, that is, whether the right to sell back has substantially changed. The risks and rewards enjoyed by the company as ordinary shareholders. Company A's investment in Company B is an equity strategic investment to achieve business synergy and capital synergy, rather than a simple financial investment . If the existence of the resale right has nothing to do with Company A’s decision to invest and withdraw from investment, and will not substantially change Company A’s long-term holding intention and method of obtaining investment returns, then the resale right is a protective right, A The company's risks and rewards assumed and enjoyed in this investment are not significantly different from those of ordinary shareholders. This equity investment is an equity investment, and the put-back right should be separated as an embedded derivative.
Question 5 [Accounting treatment of performance compensation under the same control]: If the performance commitment under the same control has not been completed, the confirmed bad debts of the compensation shall be included in the current profit and loss or offset against the capital reserve of ?
Case: In 2X18, Company A acquired Company C, a subsidiary of Company B, the controlling shareholder, and had performance commitments. In 2X18, Company C incurred a net loss of RMB 80 million due to unfulfilled performance commitments. The controlling shareholder, Company B, needed to fully compensate Company A in cash. In response to this matter, Company A recognized other receivables of RMB 80 million in 2X18 and credited it to capital reserve. Afterwards, Company B encountered operating difficulties and initiated bankruptcy reorganization in 2X20, and performance compensation has not been paid. When making provision for bad debts for other recognized receivables of Company A, should they be included in current profits and losses or offset against capital reserves?
analysis: According to the relevant provisions of the "Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investment (Application Guide)" (revised in 2014), "the long-term equity investment formed by the merger of enterprises under the same control of shall be included in the initial investment." In accordance with the provisions of "Accounting Standards for Business Enterprises No. 13 - Contingencies", judge whether estimated liabilities or assets should be recognized for contingent consideration, and the amount that should be recognized; if estimated liabilities or assets are recognized, the amount of the estimated liabilities or assets The difference with the subsequent contingent consideration settlement amount will not affect the current profit and loss of , but the capital reserve ( capital premium or equity premium ) should be adjusted. If the capital reserve (capital premium or equity premium) is insufficient to offset, the adjustment "Retained earnings." Therefore, the contingent consideration formed by the merger of enterprises under common control is accounted for according to the contingency standards. The subsequent difference with the settlement amount will not affect the current profit and loss, but should be adjusted to the capital reserve.
In this case, because the performance bet arrangement between Company A and its controlling shareholder Company B stems from the transfer of Company C, it is a contingent consideration formed by a business merger under the same control. When the conditions for the recognition of contingent assets are met, the or If there is a consideration for assets, the capital reserve will be adjusted accordingly.Contingent consideration will still be dealt with in accordance with the contingency criteria in the future, so when the relevant compensation cannot be recovered, it should be reversed back to the capital reserve in the same way.
In addition, Company A also needs to consider whether it is appropriate to recognize other receivables of RMB 80 million when Company C has not completed its performance in 2X18. According to the contingency standard, Company A is recognized as an asset only when it is basically certain that it will receive the compensation amount. "Basically certain" means that the probability is greater than 95% but less than 100%. In the case, Company B subsequently encountered operating difficulties and initiated bankruptcy reorganization in 2X20. The time interval was short. Company B was likely to have signs of financial distress in 2X18. At this time, A Company may not be basically certain that it will receive performance compensation in full, and it cannot fully confirm the performance compensation of 80 million yuan.
(3) Financial Instrument Series
Question 6 [Issue on provision of estimated liabilities for financial guarantee contracts]: What standards apply to companies providing financial guarantees?
Case: From February to March 2X19, Company A provided guarantees for two loans (with a total principal of 500 million yuan) for its associates. The associates used their land use rights and projects under construction as collateral for the two loans. . The loan guarantee contract clearly stipulates that if the joint venture cannot fulfill its debt repayment obligations when due, Company A must pay 100% of the losses to the creditor. In April 2X20, the controlling shareholder of Company A promised to compensate Company A for all future losses caused by the guarantee. In October 2X20, because the joint venture failed to perform its repayment obligations, the relevant creditors filed a lawsuit against the joint venture and Company A based on the above-mentioned loan contract and guarantee contract. By the end of 2X20, after the first-instance judgment of the court, Company A needs to bear 100% of the liability for the part that the guaranteed party cannot repay. Company A did not make any accounting treatment or information disclosure on the above-mentioned financial guarantee contract in the 2X19 annual report and the 2X20 semi-annual report. In the 2X20 annual report, according to the "Accounting Standards for Business Enterprises No. 13--Contingencies", in accordance with the first instance The judgment confirmed non-operating expenses and estimated liabilities of 500 million yuan. Does Company A's accounting treatment of the above financial guarantee matters in accordance with the contingency standards comply with the standards? Can Company A consider the value of the collateral and the compensation promised by the controlling shareholder when measuring the amount of losses?
analysis: First of all, "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments" (revised in March 2017) clearly stipulates that for financial guarantee contracts, unless they are clearly regarded as insurance contracts and have been in accordance with the relevant accounting standards for insurance contracts Except for contracts that are accounted for by , the Financial Instruments Standards apply to relevant financial guarantee contracts. In the case, the loan guarantee contract signed by Company A clearly stated that it was required to bear 100% of the losses suffered by creditors when the associated enterprise failed to fulfill its debt repayment obligations. This was in line with the concept of a financial guarantee contract stipulated in the standards, and the financial instruments standards were applied for accounting treatment.
Secondly, according to the financial instrument standards, the loss provision for a financial guarantee contract should be based on expected credit losses. In this case, Company A should not recognize the guarantee loss after the court judgment at the end of 2X20, but should confirm the loss in the financial guarantee contract. Upon signing and on each subsequent balance sheet date, accrues credit impairment losses and estimated liabilities for possible losses, and subsequent changes in credit impairment losses are included in the profits and losses of the relevant period. At the same time, Company A needs to disclose risk information related to the financial guarantee contract in accordance with the standards.
In addition, for financial guarantee contracts, credit losses shall be the estimated payment amount that the enterprise will compensate the holder of the contract for the credit losses incurred, less the amount that the enterprise expects to collect from the contract holder, debtor or any other party. The present value of the difference between the amounts. If Company A has the right to claim the property rights of the loan collateral from its associates after assuming the guarantee liability and paying full compensation, then the amount expected to be recovered from the collateral should be reflected in the measurement of expected credit losses. However, the compensation commitment provided by the controlling shareholder is the additional compensation provided by the controlling shareholder to Company A as a shareholder after the establishment of the guarantee contract, and is not part of the terms of the guarantee contract. Company A does not consider this when measuring the expected credit losses of the financial guarantee contract. should be considered and accounted for separately as equity transactions.
3. Accounting policy information
(1) The China Securities Regulatory Commission issued the "Guiding Opinions on Improving the Quality of Information Disclosure in Prospectuses under the Registration System"
On January 18, 2022, in order to further promote the improvement of the quality of information disclosure in prospectuses, the China Securities Regulatory Commission issued the " The Guiding Opinions on Improving the Quality of Information Disclosure in Prospectuses under the Registration System (hereinafter referred to as the “Guiding Opinions”) shall come into effect on the date of issuance.
"Guiding Opinions" mainly includes the following contents: First, basic principles. The second is to urge issuers and intermediaries to perform their duties and write and prepare high-quality prospectuses. The third is to give full play to the role of administrative supervision, self-regulation and market restraint mechanisms to guide and improve the quality of information disclosure in prospectuses. The fourth is to strengthen accountability.
(2) The Ministry of Finance issued the "Interpretation No. 15 of Enterprise Accounting Standards"
on December 31, 2021, in order to thoroughly implement the Enterprise Accounting Standards , solve problems arising in the implementation, and at the same time, achieve continued convergence and equality of Enterprise Accounting Standards Effectively, the Ministry of Finance formulated and issued the "Interpretation No. 15 of Accounting Standards for Business Enterprises", which mainly involves three issues: First, about the external sales of products or by-products produced by enterprises before their fixed assets reach their intended usable state or during the research and development process. The accounting treatment, the second is about the centralized management of funds and the related presentation of , and the third is about the judgment of loss-making contracts.
The contents of this explanation "About the accounting treatment of external sales of products or by-products produced by enterprises before their fixed assets reach their intended usable state or during the research and development process" and "Judgment on loss-making contracts" will be effective from January 1, 2022; The content of “Related Presentation of Funds Centralized Management” shall come into effect from the date of announcement.
(3) The Ministry of Finance issued the "Accounting Informatization Development Plan 2021-2025"
to scientifically plan and comprehensively guide the accounting informatization work during the "14th Five-Year Plan" period. According to the "Accounting Reform and Development "14th Five-Year Plan" Outline "(Financial Accounting [2021] No. 27)", the Ministry of Finance has formulated the "Accounting Informatization Development Plan (2021-2025)" (hereinafter referred to as the "Plan").
"Plan" first summarizes the situation and challenges faced by the development of accounting informatization. Secondly, based on the overall requirements, it puts forward the main tasks of the development plan: first, accelerate the establishment of accounting data standard system and promote the construction of accounting data governance capabilities; second, formulate accounting Standardize informatization work and software functions, and further improve supporting systems and mechanisms; the third is to further promote the integration of corporate finance and accounting functions, and accelerate the digital transformation of corporate accounting work; the fourth is to strengthen the digitalization and of corroborating Audit report anti-counterfeiting and other system construction for certified public accountants, and actively promote the digital transformation of audit work ; The fifth is to optimize and integrate various accounting management service platforms, and effectively promote the digital transformation of accounting management work; The sixth is to accelerate the circulation and utilization of accounting data elements, Effectively play the role of accounting information in service resource allocation and macroeconomic management; seventh, explore the establishment of sharing platforms and collaborative mechanisms to promote the interoperability and sharing of accounting supervision information; eighth, improve security management systems and security technical standards, and strengthen accounting information security and cross-border accounting information supervision; ninth, strengthen the training of accounting informatization talents and prosper accounting informatization theoretical research.
(4) The Ministry of Finance issued the "Measures for the Management of Self-Inspection and Self-Correction Reports of Accounting Firms"
In order to implement the " Opinions of the General Office of the State Council on Further Standardizing the Financial Audit Order and Promoting the Healthy Development of the Certified Public Accountant Industry " (issued by the State Council [2021 〕No. 30) relevant requirements, in order to establish and improve the self-examination and self-correction reporting mechanism of accounting firms (hereinafter referred to as the firm), consolidate the main responsibilities of the firm, promote the firm to enhance its risk management and control capabilities, and improve the internal governance level and audit quality, according to " Certified Public Accountant Law of the People's Republic of China", "Accounting Firm Practice Licensing and Supervision and Management Measures" (Ministry of Finance Order No. 97), etc., the Ministry of Finance has formulated the "Accounting Firm Self-Inspection and Self-Correction Report Management Measures
" 》, effective from March 1, 2022.
(5) The Ministry of Finance issued 11 standards including the "Basic Standards for the Assurance Business of Certified Public Accountants in China"
In order to implement the "Opinions of the General Office of the State Council on Further Standardizing the Financial Audit Order and Promoting the Healthy Development of the CPA Industry" (issued by the State Council [2021] 30) to "continuously improve audit quality" and "improve the auditing standards system" and maintain the internal consistency of the standards system. The Chinese Institute of Certified Public Accountants has adopted 11 standards including the "Basic Standards for the Assurance Business of Chinese Certified Public Accountants" It has been revised for consistency and will be released and implemented on January 5, 2022. This revision makes text adjustments to the corresponding provisions of other relevant standards involving quality management standards for accounting firms, special purpose auditing standards and the Chinese Code of Professional Ethics for Certified Public Accountants, and does not involve substantive revisions.
(6) The CICPA released the " Guidance Book for Accounting Firms Engaged in Securities Services Business (2021) "
is to help accounting firms that are newly registered or intend to enter the securities service business market to understand their internal management and undertaking of relevant securities. The responsibilities and obligations that should be performed when doing business, the business risks and legal risks that should be borne, and the warning and guidance for accounting firms engaged in securities service business should be strengthened. The CICPA focuses on the concerns of members and regards "I do practical things for the masses" as the party's history To study the important content of education, relevant industry experts were organized to produce the "Guidebook for Accounting Firms Engaged in Securities Services Business (2021)" (hereinafter referred to as the "Guidebook").
"Tutorial Reading" summarizes the relevant requirements of the new " Securities Law ", " Certified Public Accountant Law " and other laws and regulations of relevant departments. It focuses on prompting the internal management of firms engaged in securities services and securities business. Special regulations that should be paid attention to when undertaking, executing and issuing reports. The "Tutorial Reader" also appends relevant cases, laws, regulations, normative documents and other laws and regulations catalogues, for comprehensive understanding and reference.
