Shenzhen Branch of China's Security Regulator Instructs Auditors to Ramp Up Focus on Profit Manipulation
Dou Shicong
DATE:  Nov 23 2017
/ SOURCE:  Yicai
Shenzhen Branch of China's Security Regulator Instructs Auditors to Ramp Up Focus on Profit Manipulation Shenzhen Branch of China's Security Regulator Instructs Auditors to Ramp Up Focus on Profit Manipulation

(Yicai Global) Nov. 23 -- As the end of the year approaches and China's listed companies begin to submit their annual audit reports, the Shenzhen bureau of China Securities Regulatory Commission has issued a document requiring accounting firms in the region pay special attention to potential profit manipulation among public companies.

In the document it highlighted asset transactions, debt restructuring, changes in accounting policies, asset impairment accrual and transfer, related-party transactions and other unconventional operations as noteworthy areas for question.

Listed companies may sell off assets of a non-commercial nature, rush debt restructuring and other transactions to create profits or rely on arbitrarily changing accounting policies and estimates to make the books look better, the regulator's Shenzhen unit said.

The department will require accounting firms to design targeted audit procedures for these deviations in order to obtain adequate audit evidence and issue appropriate opinions.

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Keywords:   China Securities Regulatory Commission,Shenzhen,Accounting Firms,Annual Report,Profit Manipulation