The Hushen Stock Exchange sent out 129 inquiry letters last week to companies considered high-risk, which included 97 annual report inquiry letters, according to a report in the China Securities Journal on Monday.
The Hushen Stock Exchange (Shanghai and Shenzhen Stock Exchange) mainly inquired into the companies, which lost goodwill caused by acquisitions and reorganizations, were noted as high-risk and issued nonstandard annual reports, or contained doubtful fiscal performances.
Their audit of annual reports noted that the number of public companies, which lost goodwill due to a high appraisement and high-performance commitment during mergers and acquisitions, has increased substantially.
To avoid these behaviors, the Hushen Stock Exchange will strengthen its supervisions on a daily basis and urge relevant parties to make feasible arrangements for possible performance compensation.
With regards to the 2017 annual reports from the A-share listed companies, more than 100 companies received an auditor's opinion regarding nonstandard audit practices. Resultant matters included; parts of transactions that lacked a reasonable commercial substance, the audit scope was limited, relevant parties and transactions were not recognized, internal financial controls contained serious defects and so forth.
Also, some companies had misunderstood and misused the accounting principles. Some companies even seriously distorted the public companies' operating and financial conditions to misguide investors.
The Hushen Stock Exchange has developed specialized supervision plans for the nonstandard audit practices manifested in the auditor's opinions and strictly punished the companies with violations in accordance with the law.
During the past week, there were 229 supplementary announcements related to fiscal reports from Shanghai and Shenzhen. These additional announcements showed that the issue of environmental protection is getting more attention
More than 70 announcements were supplemented with information on environmental protection in the fiscal reports. These supplementary announcements mainly stated details on their subsidiaries' conditions of environmental protection policies, including information on drainage, construction and the operation of pollution prevention equipment, emergency plans for environmental accidents and so forth.
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