135 companies terminated their IPO review, of which 133 were voluntarily withdrawn. Accounts that are easy to be falsified: inventory, construction in progress, fixed assets...

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One

According to public statistics, as of May 12, the Shanghai and Shenzhen North Stock Exchanges have announced the termination of review (withdrawal of materials + veto/termination of registration) of 135 enterprises this year. Among them, 133 were voluntarily cancelled, 1 IPO was rejected, and 1 was terminated for failing to eliminate the suspension of the review in a timely manner or submit additional valid documents. Everyone pays attention to the fact that the vast majority of companies take the initiative to cancel orders, and the reasons behind them are well known. I dare not say that there will be no IPO fraud after the new regulations come, but it will definitely be much less than before, and the quality of IPOs will definitely be greatly improved.

wq502: The IPO issuance system will not change, and queuing up to issue new shares will always become the landscape of A-shares.

Little Taurus Yangyang: Let's look at it from a good perspective, I can only think like this, it is too difficult for Chinese investors.

Two

......

The matter of ST Meishang is simply a dick, and their person in charge responded directly: We are fake and listed, and everything is fake. There are even executives who fled abroad, bluntly saying: Your soil is the Z fraud, we are fraud and cash, how can we do it without the cooperation of internal ghosts?

Oh my God, I was dumbfounded when I saw this, this reply was justified, sucking billions of blood from shareholders, and it was so arrogant. In the past, when they accepted the regulatory questioning letter, they also ignored it and rejected it in various ways.

Speaking of Meishang, at its peak, it had a market value of 12 billion, and it was able to enter the CSI 1000 at all, and the result was like this. The most dramatic thing is that they moved their headquarters twice in 2022, so they didn't die, but the stock price of the headquarters moved twice rose by 40%, and shareholders ridiculed, where is the headquarters moved, and people are moving to the K-line!

The above content is quoted from the circle of friends.

Three

The inventory in the balance sheet is an account that can be easily falsified, and listed companies usually use the inventory to reconcile income and profits, and inflate the size of income and assets. Funds are transferred to related parties through inventory purchase and sales: on the one hand, the funds do not flow back to the enterprise, but directly flow out of the body; On the other hand, part or all of the funds flow back to the enterprise through operating activities, inflating revenue and profits, improving cash flow and expanding assets and equity.

It is generally analyzed by abnormal inventory growth. If a listed company's inventory grows abnormally, especially if there is no obvious reason (e.g., seasonal stockpiling, stockpiling in anticipation of price increases, etc.), it may mean that the company is inflating assets and profits by fictitious inventory. In particular, if the inventory is difficult to independently verify by a third party, such as commodities of a special nature or stored in a hard-to-reach location, it may facilitate financial fraud due to the increased difficulty of auditing.

Qiushui Traceless 1018: That's true, especially in production-oriented enterprises, I have personally experienced it, and the audit will go through the motions, after all, I don't understand, only look at the quantity, not look at what the inventory is.

Due to the wide variety of inventories and various valuation methods, it is a liquid asset with relatively weak liquidity, and it is necessary to combine the characteristics of the industry, peer comparison, financial performance and other aspects to peel back the cocoon and gradually dig deeper to identify.

Case: In 2021, Puli Pharmaceutical's inventory surged by 178.64%, from 94.09 million in 2019 to 262.2 million. In other words, 77.31% of the prepayment, about 168.11 million yuan, flowed into the inventory item. According to the 2021 annual report, the largest increase in the inventory item is raw materials.

As a result, this has led to huge fluctuations in the number of days of inventory turnover for Puli Pharmaceutical.

From 2019 to 2022, the inventory turnover days of Puli Pharmaceutical are getting slower and slower, with 145.1 days, 98.27 days, 149.5 days and 170.6 days, respectively. Among them, the inventory turnover days of 170.6 days in 2022 are the highest in the past 8 years.

Compared with its peers, the inventory project of Salubris, which also won the bid for the third batch of national centralized procurement, is in the opposite state - from 2019 to 2022, Salubris' inventory turnover days are 106.4 days, 111.3 days, 54.42 days and 46.43 days respectively.

In the context of centralized procurement to ensure most of the sales, it is abnormal that Puli Pharmaceutical's inventory flow is still slow.

Four

Construction in progress and fixed assets are high-risk areas for financial fraud of listed companies, and many listed companies need to build factories and purchase fixed assets, and the price of these things is often very high, and the key is that it is difficult to price. Therefore, the safest way to arbitrage funds is to deliberately inflate their prices, and then transfer out the higher part of the funds, some of which may be used for corruption, and the other part may also be returned to the company by buying their own products to make a large profit.

According to the evidence, fraud in construction in progress usually involves fictitious investment activities that affect profits. For example, Huizhou Lianshuo, a subsidiary of Lianshuo Technology, has inflated the assets of projects under construction. In addition, Qixin shares used the construction in progress to launder out funds, forming a huge "asset black hole".

As an asset, the value of construction in progress is difficult to accurately assess, so it has become a hotbed of financial fraud. For example, Zeda Yisheng was found to have inflated 36.3206 million yuan of projects under construction, and Tus-Environment was suspected of seriously inflating a number of projects under construction, with a total of 12.7 billion yuan.

In order to identify this type of financial fraud, it is possible to pay attention to abnormal changes in the proportion of fixed assets and construction in progress, as well as whether their accounts are consistent with actual production capacity and market demand.

Case: The proportion of construction in progress and fixed assets is unusually high.

Puli Pharmaceutical's financial anomaly is also reflected in its high proportion of construction projects and fixed assets.

From 2019 to 2022, the proportion of construction in progress and fixed assets to total assets of Puli Pharmaceutical was 52.17%, 51.03%, 47.23% and 48.58%.

In 2021, Salubris' construction in progress and fixed assets accounted for only 16.52% of total assets.

If, after verification by the regulatory authorities, Puli Pharmaceutical has financial fraud, under normal circumstances, in order to digest the inflated accounts receivable, Puli Pharmaceutical needs to falsify its own funds or other financing methods into collections, so that the inflated accounts receivable can be digested.

One of them is to build an asset procurement cycle, inflating the assets in the growth period, and falsifying the "real" capital outflow, so as to guide the return of the funds advanced by fraud in the early stage.

In particular, in 2021 and 2022, Puli Pharmaceutical's projects under construction will be as high as 1.482 billion yuan and 1.718 billion yuan.

Five

The purpose of financial fraud is usually to beautify the performance of the company, to create the illusion of good profitability by inflating revenues and inflating expenses, in order to attract investors and obtain more capital. To achieve this, fraudsters inflate assets or understate liabilities on their balance sheets to maintain the balance of their statements. However, this operation requires meticulous "retouching" and "coordination" of both the income statement and the balance sheet to ensure that the logical relationship between the two is not broken. Because a company has inflated profits in its income statement, in order to maintain the balance of its statements, it must "digest" this part of the inflated profits in the balance sheet by inflating the corresponding assets or hiding liabilities. This can cover up the problem in the short term, but in the long run, the inflated assets cannot generate real cash inflows, which will eventually lead to a deterioration in the company's financial position and even lead to a financial crisis.

Therefore, when reviewing financial statements, we must consider the income statement and balance sheet as a whole, and comprehensively analyze the authenticity and reasonableness of each data to expose possible financial fraud.

Six

The Legislative Affairs Commission of the Standing Committee of the National People's Congress held a press conference on April 19, and spokesman Yang Heqing said that the draft amendment to the Accounting Law mainly includes the following contents:

The first is to uphold the party's leadership over accounting work.

The second is to adapt to the requirements of accounting informatization and strengthen the construction of accounting information security.

The third is to strengthen accounting supervision.

Fourth, intensify the investigation of legal responsibility for financial fraud.

Youyou: Haha, the value of finance is reflected in fraud. In the future, finance will have a negative value both internally and externally. The least cost-effective profession [laughs but doesn't say anything].

I love Moyun Empty: Indeed! The risks are huge, the wages are low...

Ah Lu Hu: It is because there are too many people like you that financial fraud is rampant, if the law is really strict, the future financial status will be higher, and the income will also increase.

Zhang Beibei 0_0: Trouble to hold the boss accountable, the finance can't even drink the soup.

Ma Jinghao: Friends, what do you think?

Explain the profound financial logic in concise language, such as the article is approved by you as a sign of encouragement. It is not easy to adhere to long-term originality, I want to give up many times, persistence is a belief, focus is an attitude, accompany me all the way, and I am desolate together, thank you.