The Ministry of Finance and other four departments require strict implementation of the Accounting Standards for Business Enterprises to comprehensively improve the quality of the company’s 2021 annual report

The Ministry of Finance website reported on December 29 that the Ministry of Finance, the State-owned Assets Supervision and Administration Commission of the State Council, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission recently issued the “Notice on Strictly Implementing Accounting Standards for Business Enterprises and Doing a Good Job in the 2021 Annual Report of Enterprises.” The “Notice” requires companies to strictly implement accounting standards, strengthen internal control, and comprehensively improve the quality of the company’s 2021 annual report.

The “Notice” pointed out that 2021 is the first year that new standards such as income and leases will be fully implemented in companies that implement the Accounting Standards for Business Enterprises. The information in the annual report will directly reflect the full implementation effects of the new accounting standards; 2021 is the implementation of the reform of the delisting system. In the second fiscal year, the information in the annual reports of listed companies will directly affect the effectiveness of the implementation of the reform of the delisting system. Currently in the critical period for companies to prepare the 2021 annual report, relevant localities and units must resolutely implement the decisions and deployments of the Party Central Committee and the State Council, earnestly improve their ideological understanding, actively take measures to strengthen the implementation of the unified national accounting system, and supervise relevant companies and organizations. The accounting firm strictly implements various requirements such as the Accounting Standards for Business Enterprises, and does a solid job in the 2021 annual report.

Accounting firms shall improve the quality of audits and give full play to the role of social auditing.When an accounting firm conducts annual report audits, it should effectively implement risk-oriented audit concepts and methods, focusing oncurrencyFunds, income, inventories, fixed assets and construction in progress, goodwill, asset impairment, financial instruments, business mergers, related party transactions, accounting errors, continuing operations and other high-risk areas, strictly implement audit procedures, maintain professional suspicion, and be effective Identify, evaluate and respond to the risk of major misstatements; strictly implement audit procedures in accordance with the relevant requirements of the audit standards to ensure that adequate and appropriate audit evidence is obtained, independent, objective, and fair audit opinions are issued to ensure the quality of practice and prevent practice risks. For areas with a high incidence of financial fraud and where major professional judgments are required, accounting firms should maintain special attention and caution when auditing, improve their ability to detect financial fraud, and promote the continuous improvement of industry credibility.

Listed companies, listed companies, state-owned enterprises, financial enterprises, private enterprises, and other enterprises that implement the corporate accounting standards should earnestly perform the main responsibility of accounting information quality, and establish and improve the accounting information quality governance structure. Enterprises should strengthen the accounting standards for enterprises, especially the learning and understanding of new standards such as income, financial instruments, leases, and relevant key content of the notice, accurately grasp the relevant specific requirements, strictly follow the requirements of the enterprise accounting standards, and integrate all relevant facts and facts in combination with the actual situation of the enterprise. Circumstances, make reasonable professional judgments, conduct accounting treatment and information disclosure, and provide true and complete accounting information.Listed companies that implement the corporate internal control standard system shall establish and improve financial reporting-related internal controls, ensure the effective implementation of financial reporting-related internal controls, actively carry out internal control evaluation and internal control audits, and deal with key control links with high risks and frequent problems , It is necessary to strengthen the standard identification of internal control deficiencies, and to deal with the fraud risks related to material misstatement of financial reports, capital asset activities, income, costs and expenses, investmentM&AandReorganizationStrengthen the assessment and control of the risk of misstatement in key areas such as related transactions, important risk businesses and major risk events, and give full play to the fundamental role of internal control in improving the quality of listed companies and preventing financial fraud by listed companies.

In recent years, the Ministry of Finance and relevant parties have jointly promoted the effective implementation of accounting standards and achieved positive results, but at the same time, there have also been problems such as the lack of strict implementation of accounting standards by some companies, the distortion of accounting information by some companies, and the inadequate performance of the “gatekeeper” duties of accounting firms. . By comprehensively reflecting the financial status, operating results and cash flow of the company over the past year, the company’s annual report plays a vital role in truly and completely reflecting the company’s production and operation status.

The “Notice” stated that the Ministry of Finance, the State-owned Assets Supervision and Administration Commission of the State Council, the China Banking Regulatory Commission, and the China Securities Regulatory Commission will continue to implement the inter-departmental annual report notification mechanism, in accordance with the division of responsibilities, increase coordination and cooperation, continue to strengthen supervision and inspection, and closely follow up companies and accounting firms. The preparation, audit, and final accounts of the 2021 annual report will strengthen information sharing and communication, and increase penalties for violations of laws and regulations, such as misuse of accounting standards for financial fraud, and false audit reports issued by accounting firms.

(Source: ChinaSecuritiesNewspaper)



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