Three Gorges new material fraud was fined Wan Xin for a number of fraud company endorsement

Another listed company's financial fraud gradually surfaced. August 9, 2014, the Three Gorges New materials (600293, closing price of 5.57 Yuan) issued a notice, informed the SSE on its financial fraud punishment decision. 2011, 2012, the Three Gorges new materials through a small cost of virtual increase in the total profit of nearly 100 million yuan. As early as October 2013, the Three Gorges new materials were filed for investigation by the SFC, and then the Three Gorges new materials on the financial data issues were traced. It is noteworthy that, looking back, the Three Gorges new material financial fraud means not clever, even early signs. But why the Three Gorges new material of the time of the audit institutions in the Wan Xin million-letter accounting firm Limited (hereinafter referred to as the Middle Qin) failed to find the existing problems? August 8, 2014, the Three Gorges new materials received SSE "on the Hubei Three Gorges New building Materials Co., Ltd. and related persons to publicly condemn and publicly identify unfit to serve as a listed company directors, supervisors and senior management personnel decision" and " The decision to inform the critics of Hubei Three Gorges New building Materials Co., Ltd. These two "decision books" on the Three Gorges new materials financial fraud has been identified, and the parties responsible for the punishment. The company was publicly condemned October 16, 2013, the Three Gorges new materials have issued a bulletin said to be the SFC filed for inspection, apparently, this time from SSE's "decision" is the SFC to register the results of the identification and notification. According to SSE related documents, the Three Gorges new material financial problems are mainly reflected in two aspects. The first is serious financial fraud. The regulatory layer found that the Three Gorges new materials in 2011, 2012 Cost accounting process, respectively, less than the cost of raw materials 75.82 million yuan, 15.68 million yuan. As a result of this major accounting error, the new Three Gorges project in 2011 is attributable to the owner of the parent company net profit of 64.44 million yuan, falsely increased in 2012 attributable to the owner of the parent company's net profit of 13.33 million yuan. SSE that the above-mentioned financial fraud "causes the company financial information Disclosure distortion, serious consequences, poor nature." The second is the 2013 annual performance forecast and actual performance difference is big. The supervision layer identified, January 29, 2014, the new Three Gorges Project 2013 annual performance announcement, ~6000, is expected to 2013 annual profit of 50 million yuan million yuan, compared with a year earlier growth 240%~310%. But until April 4, 2014, the company released the 2013 performance notice correction notice said, "Years of trial accountants, the 2013 annual profit is expected to be about 33 million yuan, a year earlier than the same period of growth of about 120%." "For the reasons for correcting the performance, the new Three Gorges project has given" to the pilot production of materials 11 million yuan into the current profit and loss, at the same time, the depreciation of 2.76 million yuan, reduce the current profit of 13.76 million Yuan "," to a subsidiary of the assets to reduce the value of 1.35 million Yuan "," to a subsidiary to the evaluation of the value of the depreciation of 3.6 million yuan "interpretation , but SSE that, although the Three Gorges new materials on the above related assets impairment, depreciation risk are can be estimated, but the company did not fully estimate the risk, also did not disclose the uncertainty in advance, leading to the company's performance forecasts eventually appear different circumstances, its behavior is obviously imprudent. In view of the above two issues, SSE identified as Chairman Xu Lin, when director and financial director Liu Yuchun should be responsible for the above issues, gave the "public condemnation of the new Three Gorges", "the time of the chairman of the Xu Lin, when the director and financial director Liu Yuchun to publicly condemn, and publicly determined that its 3 years is not suitable to serve as a listed company directors, Supervisors and senior management "," to the time of the vice chairman and general manager Zhang Jinqui and other more than 10 executives informed criticism "of the disciplinary decision. Repeatedly revised annual report "Daily economic news" reporter noted that October 16, 2013 Three Gorges new materials by the Securities and Futures Commission, the Three Gorges new materials of the various problems began to surface gradually. October 25, 2013, the Hubei Securities and Regulatory Bureau also adopted administrative supervision measures for the new Three Gorges project, informing them that "no other legal person directly or indirectly controlled by the director Li Wei was disclosed in the 2012 annual report, nor did it disclose the company's dealings with these affiliated parties", In the 2012 annual report of the Board of Directors report on the total amount of research and development expenditure statement is not true "," the company will be 10 million yuan and assets-related government subsidies one-time confirmation of 2012 years in the current income, "Three will operate, insider management system, such as corporate governance is not standardized", " The company and the State Medicine Co., Ltd. custody fees follow-up matters have not yet been implemented in place "and other five major issues. February 12, 2014, the current audit institutions of the Three Gorges new materials, all the central Haitian accounting firm issued "on Hubei Three Gorges New building Materials Co., Ltd. to correct the early errors of the special statement," The Three Gorges New materials 2013 early errors were corrected. As a result of the Three Gorges new materials in 2011, 2012 Cost accounting process, respectively, less raw material cost of 75.82 million yuan and 15.68 million yuan, which led to 2011, 2012 annual operating costs of 75.82 million yuan and 1568 yuan respectively, the income tax is more than 11.37 million yuan, 2.35 million yuan, Annual retained earnings are more than 64.44 million yuan, 77.77 million yuan respectively. According to the above announcement, the Three Gorges new material is a long-standing problem. and "Daily economic news" After looking at the Three Gorges new material over the years of the bulletin found that the Three Gorges new materials financial fraud or early clues. "Daily economic news" reporter found that the Three Gorges new materials 2011 years, 2012 Annual report have been "revised." For example, in the 2011 revised edition of the annual report, the new Three Gorges project has added the "reason analysis of the net profit sharp decline" and so on, in view of the 2012 annual report, SSE's ex post audit opinion letter has already discovered the Three Gorges new material "main business cost", "the glass manufacture processing industry cost", the Board report " Glass manufacturing and processing industry incurred operating costs, such as the three cost data inconsistencies. The audit institution did not find the problem according to the result of SSE, the corrupt behavior of the new Three Gorges project is mainly to reduce the cost of raw materials. An accountant told the Daily Economic newsReporter, for a financial public listed companies, the virtual reduction of raw material costs is not a very covert behavior. However, the Three Gorges new materials in the time of the audit agency Wan Xin failed to examine the problem. "Daily economic news" reporter carefully read the Three Gorges New Materials issue annual report found that many of the data could not withstand scrutiny. For example, in the Three Gorges New Materials 2011 Annual report, the Three Gorges new materials in revenue growth of 10.27%, the net profit fell 60.62%. To account for the sharp decline in net profit, Three Gorges new materials gave three reasons, respectively: Financial costs rose 76.47% year-on-year, management costs increased by 44.39% per cent, the original fuel prices rose, the original fuel costs up 19.27% year-on-year, product sales price drop, each heavy box of glass sales price down 21%. However, the daily economic news reporter calculated that the first reason for the above management fees and financial costs total increased by 45.024 million yuan. Assuming that there is no such increase in these two costs, the new Three Gorges project net profit should be 64.078 million (original net profit of 19.054 million Yuan + two expenses more than 45.024 million). Its net profit margin of 2011 year income 1,088,898,000 Yuan is 5.88%. According to the income of $929.564 million in 2010, net profit margin of 48.38 million yuan was 5.2%. As the "original fuel costs up 19.27%", "each heavy box of glass sales price down 21%." In the case of falling prices and rising costs, the net profit margin of the new Three Gorges project will rise, which is obviously unreasonable. For example, in the original 2011 Annual report of the Three Gorges New materials, the book value of raw materials in its inventories soared from 63.907 million in 2010 to 178.565 million yuan, adding 114.658 million yuan, or 180%. So, in the case of income growth of 10.27%, the original fuel price rose 19.27%, the Three Gorges new materials to increase so much raw material inventory is obviously unreasonable. "Daily economic news" reporter noted that in the Three Gorges New Materials 2011, 2012 Annual Report, its audit institutions are the Sino-qin million letter, and the Wan Xin are the Three Gorges new materials issued a "Standard No reservations" audit report. January 2014, the Three Gorges new materials issued a notice to replace the company has served 14 years in the accounting firm million letter. The reason given was "too long service". Sino-Qin million believe that the blame is now, the supervision of the Three Gorges new material financial fraud, when the audit institutions Wan Xin naturally difficult to blame. "Daily economic news" reporter noted that the Wan Xin audit problem is not limited to the Three Gorges new material a listed company. As early as June 8, 2005, Zhong Qin million letter because of its service object song technology (now known as "Hua Plastic Holdings", 000509, closing price of 4.76 yuan) of the holding subsidiary of Jingzhou Tian Song Modern Agriculture Co., Ltd. 2001 large bank deposit receipts and balances are not sufficient, aquatic products inventory and other issues were punished by the SFC. September 17, 2012, certificateThe supervision Bureau of Henan Province has taken orders to rectify the problems of the mass media (000719, closing price 12.82 yuan), such as corporate governance, information disclosure, internal control, financial management and accounting. Because of the large number of financial problems such as "the accounting methods of listed companies and their subsidiaries and the lack of unification of financial management system", the market has challenged the Wan Xin of its audit institutions. November 25, 2013, Yang Coal Chemical industry (600691, before the closing price of 4.38 yuan) received the Sichuan Securities Regulatory Bureau 4 tickets, the reason is the company 2012 false sales of more than 4.2 billion yuan, accounting for the total revenue of the year 19.66%. And the Wan Xin is its audit organization. In the 2014-year comprehensive evaluation of accounting firms issued by the Sino-Note Association, the Wan Xin ranked 26th in the list, which was deducted 10 points for criminal penalties, administrative punishments and industry corrections, doubling the penalty of 5 points in 2013.