Summary of the practice quality inspection of the 2005 CPAs in Beijing

Accounting firms:
According to the "Certified Public Accountants' Practice Quality Inspection System" of the Chinese Institute of Certified Public Accountants and the "Notice of the Chinese Institute of Certified Public Accountants on the Implementation of the 2006 CPA Practice Quality Inspection Work", we will be from July 4 to August 30, 2006. On the day, 50 accounting firms were inspected and 13 firms reviewed. Reporting from the following four aspects:
I. Characteristics and basic practices of this year's inspection work The supervision and inspection of the quality of practice is the inherent requirement and objective need of the industry's integrity construction. The inspection work was arranged by the leaders of the association. The supervision department was organized and implemented. Based on the previous experience of inspection work, the inspection work in 2006 was carefully prepared and carefully arranged in terms of planning, organization and implementation. .
Do a good job in all preparations before the inspection.
After the inspection of the work arrangement of the China Federation of Investors, we revised the practice quality inspection work plan, determined the contents, scope, inspection methods and methods of the inspection in 2006; held a practice quality inspection work arrangement meeting, and deployed the business quality this year. checking work.
A training course for inspectors was held to train 40 inspectors before the inspection; for the characteristics of small-scale enterprises, the inspection work of small-scale enterprises was simplified.
The characteristics and basic practices of the inspection work are in accordance with the requirements of the China Association for the Advancement of Initiatives, and in conjunction with the principle of non-repetition inspection by the Supervision Office of the Finance Bureau, 50 enterprises are inspected, of which 45 newly established after 2004 have qualifications for securities and futures business. Two of the two companies that have not received the self-discipline inspection of the association within five years, and reviewed the quality of the practice of the 13 firms that were compulsory training last year.
Scope of inspection: 2005 annual audit report of listed companies, large and medium-sized state-owned enterprises and foreign-invested enterprises issued in January-April 2006. A total of 2,451 annual audit reports were issued by the inspected offices, and 226 inspections were conducted by the inspection team. The proportion of random inspections was 9.2%.
In order to facilitate the inspection of personnel work, and at the same time does not affect the normal business of the inspected office, unlike previous years, we have taken two methods of on-site inspection and centralized inspection of materials from the actual situation.
When extracting audit business items, select the types of business and business items that fully reflect the level of practice of the firm, so that the sample of inspections taken is broad and representative. For example, select the business items of different audit departments or audit teams; select the audit reports completed by different signed CPAs.
This inspection provided an opportunity for CPAs to interact with each other. Many of the offices that were inspected attached great importance to exchange experience and experience with inspectors. Many firms regarded the exchange of inspections between the inspection team and the firm as A good opportunity for professional training for CPAs. Through the discussion and exchange between the inspectors and the CPA, the purpose of improving the quality of the firm's business has been achieved.
Second, the main problems found in the inspection Internal quality control problems The inspection of the internal quality control of the firm, mainly by questionnaires, on-site inquiry and combined with the inspection of specific audit projects.
During the inspection, most of the firms found a set of internal quality control systems and business project risks with project content, project risk management, responsibilities of all levels of business personnel, audit work draft review requirements, and internal control evaluation procedures. The control procedures provide a guarantee for the quality of the service in the system.
However, a few firms lack specific and feasible systems. If some firms do not have a practice or audit manual, some formally implement a three-level review procedure, but they do not sign opinions. There is no review of the procedures and contents of the review. It is recorded that there is a lack of clear division of responsibilities between the various levels of review, resulting in a three-level review in the form.
The new institutes and small institutes inspected are more concerned about market development, system construction and implementation are in weak links, and project quality control depends on specific practitioners. Therefore, due to the different composition of personnel, different project groups have great differences in the quality of practice between projects, and the risk control standards are not uniform.
Problems in ethics In this inspection, we used questionnaires, on-site and relevant auditors to inquire about the situation, and found that the firm and CPA were maliciously violating professional ethics.
However, we found that the business fees of the firm are mostly low, and some business charges are only 20-30% of the standard fees; CPAs generally do not communicate with the former CPA on the new undertaking business. In addition to the influence of the practicing environment, the quality of the practicing team, and the unfair competition, some of the firms themselves have the situation of heavy income and light quality, especially the release of the batch, and some firms have internal differentiation and business. The trend of loss, this situation will inevitably exacerbate unfair competition among peers.
Third, the specific audit project problems analysis of legal responsibility issues
1. Pay insufficient attention to accounting responsibility and audit responsibility. If the collected financial report is not signed or sealed by the person in charge of the unit or has no official seal of the unit; the name of the firm is used as the header or footer of the notes to the accounting statement; the related party relationship and its transaction are not disclosed in accordance with the requirements of the Accounting Standards for Business Enterprises. The contents of the main statement items are not listed in the notes to the accounting statements; the date of approval of the financial statements is not disclosed; the date of the signing of the management statement is not signed or the date of signing is inconsistent with the date of the audit report.
2. The audit report filed in the draft did not strictly implement the signature and seal system. If the CPA is only stamped, there is no signature or only the signature is not stamped; it should not be used as an auxiliary file for the contents of the audit report. If there is an attached financial statement in the body of the report.
3. The new office and the small office pay insufficient attention to the business engagement book. If there is no business agreement, the instinct of the agreement is incomplete or the content is not appropriate, the audited enterprise is not stamped, and the date of the report or the date of no signing or effective date is not clearly stated. The date of signing is later than the date of the report, and the annual audit report is not properly qualified. The scope of use, etc.
The lack of legal awareness is a relatively common problem found in business inspections this year. We believe that if the audit business of the firm involves relevant departments such as the court and the public security, the above problems will cause the firm and the certified public accountant to bear unnecessary legal responsibilities.
Problems in comprehensive projects
1. Generally, the compilation of audit plans is not taken seriously. Some firms have not prepared an audit plan. Or the specific audit plan is fixed, and it is not adjusted according to the actual situation of the project to meet the needs of the project. The description of the implementation of the audit schedule is generally not taken seriously. The reduction of the audit program without the approval of the responsible person is very arbitrary in the actual implementation process. There is no analysis of the relevant risk factors of the enterprise in the audit plan. There is no process and basis for determining the importance level. There is no description of the audit objectives. The previous annual audit description is simple, there is no expense budget, and important audit areas and subjects. The audit program did not explain.
2. The firm generally did not pay enough attention to the opening balance, did not obtain favorable evidence of the atable opening balance, and did not implement the corresponding auditing program; it did not trace the large amount of carry-over items affecting the current period, and did not fully consider the beginning of the period. The impact of the balance on the accounting statements.
3. There is no audit summary. No conformance test records, audit difference summary tables, and trial balances were prepared.
4. The purpose of the conformity test is not clear. The results of the conformity test do not form a corresponding relationship with the time, nature and scope of the substantive test, and the characteristics of the system-based audit are not reflected. The basis for determining the conformity test sample size is not fully explained.
5. A permanent file has not been established separately. For the first time, the long-term archives are collected.
There is a problem with the substantive test
1. The general implementation of the letter of the current payment is not in place. The auditing procedures for receivables and payables only have account reconciliation, checklist reconciliation, lack of necessary aging analysis and correspondence procedures; some have issued letters, but in the case of few replies, they have not executed any The alternative program is confirmed. For example, if a firm audits a material company, the company's other receivables amounted to 72.25 million yuan, accounting for 34.74% of the total assets. The audit program that did not implement the certificate was confirmed without any alternative program.
2. The inventory supervision program is generally not in place. For the audit of physical assets, generally only the detailed list or inventory table provided by the customer is obtained. There is no supervision or draw record of the firm. Some have counted or drawn records, but the data of the inventory date is not inverted. Checking on the reporting date, the auditing program implemented cannot achieve the auditing purposes; for the physical assets that cannot be executed or drawn for objective reasons, the relevant alternatives are not implemented; the lack of auditors’ attention to the property rights of large assets, For example, invoices for fixed assets with large amounts, customs declaration files for imported equipment, construction permits for construction in progress, housing and land use rights certificates and related mortgages.
For example, the inventory amount of a decoration project audited by a firm is 12.34 million yuan, accounting for 38.77% of the total assets. Among them, the construction of the project was 12.3 million yuan. The certified public accountant did not prepare the detailed list according to the project, did not pay attention to the progress of the project, and did not conduct the auditing program of the physical supervision.
3. The long-term investment draft does not indicate the investment ratio and accounting method. For the investment with a large proportion of the contractual agreement, it is not checked whether the long-term investment is accounted for using the equity method, there is no correct adjustment of the current profit and loss, and whether the consolidated statement should be prepared for judgment.
4. Revenue recognition does not comply with the relevant standards. For example, a construction company's current accounting statements confirmed revenue of 1.53 billion yuan. The CPA did not obtain the confirmation basis for the project settlement income, and did not combine the project contract, project progress, etc. to determine the income, and did not consider the impact of the revenue recognition method team accounting statements.
5. Most of the firms inspected generally had insufficient work papers on the audit of the cash flow statement.
6. The audit evidence collected is insufficient and inappropriate, which is not enough to form a strong support for the audit conclusion. The auditors copied a large number of the company's general ledger, detailed accounts, accounting vouchers and original vouchers, blindly collected invalid audit evidence, and did not analyze the evidence and track and record the professional judgment; some audit evidence did not support the audit conclusion or two. Some cases are inconsistent; some collect audit evidence is not sufficient and the purpose is not strong, the proportion of certificate check is too low, can not be the basis for supporting the audit conclusion; some audit projects, for important matters did not obtain audit evidence, the inspectors can not further judge The impact of the audit opinion.
For example, the income of a company's main business increased by 106.30%, but the main business cost only increased by 20.41%. The revenue growth in 2005 was mainly for sales to a single customer, with sales of 23.89 million yuan, of which accounts receivable was 14.37 million yuan. There is no main business cost for this sale. The transaction was a major abnormal transaction near the balance sheet date. The CPA did not pay sufficient attention to the financial status, sales scale, and solvency of the transaction object. The auditors did not carefully check the relevant contract terms and did not pay attention to whether their sales were in line with the income. Confirmation conditions; did not pay attention to whether the company has actually shipped, did not check the delivery procedures, and did not obtain the relevant acceptance certificate.
7. The type of audit opinion is not appropriate.
The reservations of the audit reports issued by some of the firms are not disclosed in the main text, but are described in the form of audit matters.
The scope of the audit in the audit report is incorrectly defined. A company is a consolidated accounting statement. The audited financial statements of the parent company are only issued to the parent company's accounting statements rather than the consolidated financial statements. However, the statement in the scope of the audit report is “we have audited the attached The company's balance sheet on December 31, 2005 and the 2005 income statement and cash flow statement...." virtually expanded the accountant's responsibilities.
Substitute the audit report opinions in the way of the major problems found in the audit process by means of the disclosure of the notes to the financial statements, so as to “evade” the audit risks and cause improper audit opinions. Such as an enterprise intangible assets - patents at the beginning of 2005, 1.4 million

[1] [2] Next page