Core Viewpoint - The article highlights the increasing scrutiny and penalties faced by accounting firms in China, particularly focusing on the violations committed by Xinyong Zhonghe and Zhongxing Caihua in their audit practices, which have led to regulatory actions and fines [1][2][4]. Group 1: Violations and Penalties - Xinyong Zhonghe received a regulatory letter from the Shenzhen Stock Exchange for five violations in the audit of Hailian Jinhui's 2023 annual financial report, including inadequate execution of audit procedures and failure to maintain professional skepticism [2][4]. - Zhongxing Caihua was warned by the Xiamen Securities Regulatory Bureau for six issues in the audit of Xiamen Haiheda's 2023 annual report, including deficiencies in control testing and revenue audit procedures [2][3]. - In 2025, 38 accounting firms have received regulatory letters or administrative penalties, with 40% facing fines typically ranging from 2 million to 50 million yuan [1][6]. Group 2: Specific Cases and Financial Impact - Xinyong Zhonghe has faced a total of nine penalties in 2025, with fines exceeding 14.34 million yuan due to violations in annual report audits [4][5]. - Specific penalties include a fine of 3.35 million yuan for significant omissions in the audit of Zhongtai Chemical's 2021 report and a fine of 420,000 yuan for false records in the audit of Hengxin Xili [5][6]. - Among the 38 penalized firms, 16 have had their illegal income confiscated and fined, accounting for 42% of the total, with some firms facing fines exceeding 10 million yuan [6].

Core Viewpoint - Tianzhi International Accounting Firm received a regulatory letter from the Shenzhen Stock Exchange for violations during the audit of Dayang Electric's 2023 financial statements, highlighting deficiencies in audit procedures and internal controls [1][2][6]. Group 1: Violations Identified - Tianzhi International failed to adequately execute risk assessment and internal control testing procedures, including insufficient execution of walkthrough tests and control tests [1][5]. - The firm did not properly conduct audit procedures related to revenue, inventory, and costs, including inadequate testing of revenue recognition, inventory impairment provisions, manufacturing expenses, accounts payable, government subsidies, and other receivables [1][5]. - There were deficiencies in confirmation, audit sampling, and the use of expert work, such as not investigating discrepancies in confirmation letters and inappropriate sampling methods [1][5]. Group 2: Regulatory Framework - The actions of Tianzhi International violated multiple articles of the Shenzhen Stock Exchange's "Stock Listing Rules (Revised August 2023)," including Article 1.4, which mandates compliance with laws and regulations by all parties involved in significant transactions [2][3]. - Article 12.1.2 emphasizes the need for intermediary institutions to act diligently and ethically, which was not adhered to by the auditors involved [2][3]. - Article 12.3.3 requires accounting firms to maintain a risk-oriented audit approach and to execute audit procedures thoroughly, which was also not followed in this case [2][4].

Core Viewpoint - Tianzhi International Accounting Firm and its certified public accountants Han Yangguang and Pan Pingping have been issued a regulatory letter by the Shenzhen Stock Exchange due to violations in the audit of Zhongshan Dayang Electric Motor Co., Ltd.'s 2023 financial statements [1][2][7]. Group 1: Violations Identified - Tianzhi International failed to adequately execute risk assessment and internal control testing procedures, including insufficient execution of walkthrough tests and control tests [1][6]. - The firm did not properly conduct audit procedures related to revenue, inventory, and costs, including inadequate procedures for revenue recognition and goodwill impairment [1][6]. - There were deficiencies in audit sampling, confirmation, and expert work, such as not investigating discrepancies in confirmation replies and inappropriate sampling methods [1][6]. Group 2: Regulatory Framework - The actions of Tianzhi International violated multiple articles of the Shenzhen Stock Exchange's "Stock Listing Rules (Revised August 2023)," including Articles 1.4, 12.1.2, 12.1.3, 12.1.4, and 12.3.3 [2][7]. - The rules stipulate that intermediary institutions must act diligently and responsibly, maintain effective quality control systems, and ensure the accuracy and completeness of the documents they produce [3][4][7]. Group 3: Recommendations - The Shenzhen Stock Exchange has urged Tianzhi International to strictly adhere to relevant laws, industry standards, and the Exchange's business rules, emphasizing the need for improved quality management and audit execution [2][7].

Core Viewpoint - The article discusses the regulatory actions taken by the Shenzhen Stock Exchange against Da Xin Accounting Firm and its certified public accountants for violations during the audit of Guanhao Biotechnology Co., Ltd.'s 2023 financial statements [2][3][4]. Summary by Sections Audit Violations - Da Xin Accounting Firm exhibited several violations in the audit of Guanhao Biotechnology's 2023 financial statements, including inadequate execution of risk assessment and internal control testing procedures [2][3]. - Specific deficiencies included insufficient execution of walkthrough tests and accounting entry tests, as well as a lack of control testing for certain business operations [2][3]. Inadequate Audit Procedures - The audit procedures related to revenue, long-term assets, inventory, and costs were not adequately performed, with particular shortcomings in the audit of certain business revenues and long-term assets such as construction in progress, intangible assets, and fixed assets [2][3]. - There were also deficiencies in the audit procedures for sales expenses and inventory, as well as inadequate responses to key audit matters regarding revenue recognition [2][3]. Confirmation Procedures - The firm failed to properly execute confirmation procedures, including a lack of attention to abnormal responses and inadequate alternative procedures [2][3]. Compliance Issues - Da Xin Accounting Firm's actions violated the Shenzhen Stock Exchange's "Rules for Listing of Stocks on the Growth Enterprise Market (Revised August 2023)" [4]. - The certified public accountants, Li Cheng and Huang Ying, did not fulfill their duties diligently, also violating the same listing rules [4]. Recommendations - The Shenzhen Stock Exchange urged Da Xin Accounting Firm to strictly adhere to relevant laws, regulations, and industry standards, emphasizing the need for improved quality management and audit execution [4].

Core Viewpoint - The article discusses the disciplinary action taken by the Shanghai Stock Exchange against Zhongshen Zhonghuan Accounting Firm and two certified public accountants for their inadequate auditing practices related to Yantai Yuancheng Gold Co., Ltd's 2021 annual report, which resulted in significant financial misstatements [2][5]. Group 1: Violations Identified - Yantai Yuancheng Gold Co., Ltd's 2021 annual report had inaccuracies in revenue recognition and incomplete accounting for employee compensation and custody costs, leading to an inflated revenue of 64.95 million yuan, accounting for 28.86% of the reported revenue, and an inflated profit of 521,000 yuan, representing 15.27% of the total profit [3][8]. - Zhongshen Zhonghuan, as the auditing firm, and the accountants Li Jian Shu and Yu Jun, failed to execute adequate risk assessment procedures and control tests, particularly for significant accounts such as cash, receivables, and expenses [4][9]. Group 2: Specific Audit Failures - The audit of cash did not include follow-up procedures for missing bank confirmations, and there were no records of cash monitoring [4][10]. - In the accounts receivable audit, there was a lack of verification for the addresses of confirmations sent and received, and no further checks were made on electronic confirmations [9][10]. - The inventory audit lacked sufficient analysis of the impairment of development products and did not adequately address properties still recorded as inventory [9][10]. Group 3: Disciplinary Actions - The Shanghai Stock Exchange decided to issue a public reprimand to Zhongshen Zhonghuan and the two accountants due to their failure to perform due diligence and the serious nature of the violations [5][15]. - The disciplinary committee found that the accountants did not provide substantial evidence to counter the identified violations, leading to the conclusion that the audit procedures were not adequately executed [15][16]. - The firm is required to submit a rectification report within one month, detailing measures taken to address the identified issues and improve audit quality [16].

Core Viewpoint - The Shenzhen Stock Exchange issued a regulatory letter to Zhihong Accounting Firm (Special General Partnership) and criticized the signing accountants for their inadequate audit practices during the financial statement audit of Jiangsu Lihua Animal Husbandry Co., Ltd. for the year 2023 [1][4]. Group 1: Audit Violations - Zhihong Accounting Firm and the signing accountants failed to execute audit procedures adequately related to inventory, risk assessment, internal control testing, sampling, revenue, cash funds, and share-based payment expenses [2][4][5]. - Specific deficiencies included insufficient attention to inventory-related audit evidence, inadequate execution of risk assessment procedures, and failure to perform necessary audit sampling [3][5][6]. - The firm did not verify the accuracy and completeness of business data in the ERP system and failed to obtain sufficient audit evidence regarding the timing of certain construction projects being capitalized [6][7]. Group 2: Quality Management Issues - The firm did not ensure that the project team adhered to quality review procedures and failed to implement quality review opinions effectively [3][8]. - There were inconsistencies in the preparation of audit work papers, including discrepancies between the directory and actual content, leading to incomplete documentation [3][8]. - The actions of Zhihong Accounting Firm violated the regulations set forth in the "Rules for Listing of Stocks on the Growth Enterprise Market (Revised in August 2023)" [8].

Core Viewpoint - The article discusses the disciplinary actions taken by the Shenzhen Stock Exchange against Tianjian Accounting Firm and its certified public accountants for their involvement in the financial fraud case of Sichuang Medical Technology Co., Ltd, highlighting the serious implications of falsified financial statements and inadequate auditing practices [1][4]. Group 1: Disciplinary Actions - Tianjian Accounting Firm and its certified public accountants Hu Yanlong, Xu Lili, and Ni Bin received disciplinary actions for their roles in the financial fraud case involving Sichuang Medical [1][4]. - Hu Yanlong and Xu Lili are prohibited from signing any issuance and disclosure documents from June 28, 2025, to June 27, 2026 [1][4]. - Tianjian Accounting Firm received a public reprimand, while Hu Yanlong and Xu Lili also faced public reprimands, and Ni Bin received a notice of criticism [1][4]. Group 2: Fraudulent Activities - Sichuang Medical was found to have fabricated significant false content in its public offering documents, including financial data from 2017 to 2020 [1][7]. - The company inflated revenue and profits through fictitious transactions with subsidiaries and early revenue recognition practices [1][7]. - The 2019 and 2020 annual reports of Sichuang Medical contained false records, failing to accurately disclose financial data [1][7]. Group 3: Audit Failures - Tianjian Accounting Firm failed to effectively identify and assess fraud risks during the audit of Sichuang Medical [1][8]. - The firm did not implement adequate audit procedures regarding abnormal revenue recognition and did not obtain sufficient appropriate audit evidence [1][9][10]. - There were discrepancies between the audit documentation and actual execution, indicating a lack of due diligence in the auditing process [1][12][13].

Group 1 - The Xiamen Securities Regulatory Bureau disclosed a penalty announcement against Rongcheng Accounting Firm for inadequate audit procedures during the annual report audit of Ruida Futures Co., Ltd [1][2] - Issues identified include insufficient audit evidence for revenue recognition, inadequate confirmation procedures, and incomplete or inaccurate audit documentation [1][2] - The actions of Rongcheng violated the "Management Measures for Information Disclosure of Listed Companies" and resulted in warning letters issued to the firm and responsible auditors [2] Group 2 - In April, the Xiamen Securities Regulatory Bureau issued a warning letter to Ruida Futures for poor internal control management and non-compliance with accounting standards regarding revenue recognition [2] - The internal control issues at Ruida's subsidiary, Ruida Xinkong Capital Management Co., Ltd, led to inaccuracies in financial data disclosed in annual reports [2]

Core Viewpoint - The China Securities Regulatory Commission (CSRC) has imposed penalties on Zhongshen Hua Accounting Firm for failing to conduct due diligence during the audit of Ningxia Yuangao Industrial Group's financial statements for 2018 and 2019, resulting in false records of cash, revenue, and profits [1][5]. Summary by Sections Audit Violations - Zhongshen Hua's audit reports contained false records, with Ningxia Yuangao's 2018 and 2019 annual reports showing inflated cash, revenue, and profit figures [1][5]. - The firm failed to develop specific audit plans and did not adequately identify and assess risks, leading to significant deficiencies in fraud risk response and audit procedures [6][8]. Specific Audit Failures - The firm did not independently send confirmation letters and failed to monitor the mailing process, exposing the audit to risks of interception and alteration [11]. - In 2018 and 2019, Zhongshen Hua did not execute planned audit procedures to test the effectiveness of the financial reporting system, violating relevant auditing standards [7][8]. Penalties Imposed - The CSRC has ordered the confiscation of Zhongshen Hua's audit business income amounting to 754,717 yuan and imposed a fine of approximately 1,509,433 yuan. The two signing accountants, Zhao Gang and Wang Haiting, were each fined 250,000 yuan [2].

Core Viewpoint - The Shenzhen Securities Regulatory Bureau has imposed administrative penalties on Lixin Certified Public Accountants for their audit of the financial statements of Rihai Intelligent Technology Co., Ltd. for the years 2018 and 2019, citing false records and inadequate audit procedures [1][4][11]. Group 1: Audit Violations - Lixin's audit reports and related documents for Rihai Intelligent contained false records, leading to inflated profits of 33.43 million yuan in 2018 and 3.68 million yuan in 2019, which represented 37.58% and 5.13% of the reported profits for those years respectively [1][4][10]. - The audit procedures for goodwill were inadequately executed, as Lixin relied on an asset evaluation report that did not consider the impact of minority shareholders' equity on goodwill, resulting in incorrect audit conclusions [2][5][9]. - The audit of main business income was also insufficient, with Lixin failing to account for significant financing components in a contract, leading to an overstatement of income by 2.13 million yuan [2][6][9]. Group 2: Penalties and Responsibilities - Lixin was ordered to correct its practices, had its business income confiscated amounting to 3.77 million yuan, and was fined 7.55 million yuan [11][12]. - The responsible auditors, Zhang Yong and Wang Zehui, received warnings and fines of 550,000 yuan and 500,000 yuan respectively for their roles in the audit failures [11][12]. - The regulatory body emphasized that Lixin's actions violated multiple provisions of the Securities Law and auditing standards, indicating a lack of due diligence in their audit processes [6][10][11].