审计报告英文版(全)
AUDITOR’S REPORT Yue Hua Shen / Yan Zi (2014) No. 0002
ICPA filing number: 020201401000420
To all shareholders of ****** Co., Ltd: We have audited the accompanying financial statements of ****** Co., Ltd (“Your Company”), which comprise the balance sheet as of 31 December 2013, the income statement,
statement of changes in owner"s equity and cash flow statement for the year then ended, and notes to the financial statements. I. Management’s responsibility for the financial statements Management of your Company is responsible for the preparation and fair presentation of financial statements. This responsibility includes: (1) in accordance with the Accounting Standards for Business Enterprises and its relevant provisions, preparing the financial statements and reflecting fair presentation; (2) designing, implementing and maintaining the necessary internal control in order to free financial statements from material misstatement, whether due to fraud or error. II. Auditors" responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Chinese Certified Public Accountants Auditing Standards.
Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors" judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider the internal control relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. III. Opinion In our opinion, the financial statements of your Company have been prepared in accordance with the Accounting Standards for Business Enterprise and its relevant provisions in all material respect, and present fairly the financial position of your Company as of 31 December 2013, and the results of its operations and cash flows for the year then ended.
Guangdong Huaxin Accounting Firm (general partner) Guangdong, China
Chinese Certified Public Accountant:
Chinese Certified Public Accountant:
January 3, 2014
BALANCE SHEET
AS OF 31 DECEMBER 2013
Unit: RMB Yuan Company: ****** Co., Ltd Asset
Ending balance Beginning Balance Liabilities and all parties’ equity (or shareholders" equity) Ending balance Beginning Balance Current Assets:
Current liabilities:
Monetary funds
Short-term borrowings
Transaction financial asset
Transaction financial liabilities
Notes receivable
Notes payable
Account receivable
Account payable
Account paid in advance
Account received in advance
Interest receivable
Employee’s compensation payable
Dividend receivable
Tax payable
Other account receivable
Interest payable
Inventories
Dividend payable
Non-current assets due within 1 year
Other account payable
Other current assets - - Non-current liabilities due within 1 year
Total current assets
- Other current liabilities
Non-current assets:
Total current liabilities
- Available for sale financial assets
Non-current liabilities:
Maturity investments
Long-term borrowings
Long-term account receivables
Bonds payable
Long-term equity investment
Long-term account payable
Investing property
Special payables
Fixed asset
Accrued liabilities
Project in construction
Deferred tax liabilities
Engineering material
Other non-current
liabilities Fixed asset disposal
Total non-current liabilities - - Production biological assets
Total liabilities
- Oil and gas assets
Owner’s equity ( or shareholders’ equity)
Intangible assets
Paid-in capital (or share capital)
Development expense
Capital surplus
- Goodwill
Less: Treasury Stock
Long-term expense to be apportioned
Earned surplus
Deferred tax assets
Retained earnings
- Other non-current assets
Total owner’s equity (or shareholders’ equity)
- Total non-current assets
-
Total assets
- Total liabilities and owner’s equity (or shareholders’ equity)
- Prepared by:
Audited by:
Finance Manager:
Company Leader:
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2013
Unit: RMB Yuan Company: ****** Co., Ltd Items
Cumulative amount in this year Amount in last year I. Operating income
Minus: Operating cost
Taxes and associate charges
Selling and distribution expenses
Administrative expenses
- Financial expense
- Asset impairment loss
Plus: gain from change in fair value ( loss with ‘-‘)
Gain from investment ( loss with ‘-‘)
Including: income form investment on affiliated enterprise and joint enterprise
II. Operating profit (loss with ‘-‘)
- Plus: non-business income - - Less: non-business expense
Including: loss from non-current asset disposal
III. Total profit (loss with ‘-‘)
-
Less: Income tax
IV. Net profit (loss with ‘-‘)
- V. Earnings per share
(I) basic earnings per share
(II) diluted earnings per share
VI. Other comprehensive earnings
VII. Total comprehensive earnings
- Prepared by:
Audited by:
Finance Manager:
Company Leader:
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2013
Unit: RMB Yuan Company: ****** Co., Ltd Items
Times
Amount in this year
Cumulative amount in last year 1. Cash flows arising from operating activities: 0
Cash received from sales of goods or rending of services 1
Refund of tax and fare received 2
Other cash received relating to operating activities 3
Sub-total of cash inflows 4
Cash paid for goods and services 5
Cash paid to and on behalf of employees 6
Tax and fare paid
7
Other cash paid relating to operating activities 8
Sub-total of cash outflows 9
Net cash flow from operating activities 10
2. Cash flows arising from investment activities 0
Cash received from return of investments 11
Cash received from investment income 12
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets 13
Net cash received from disposal of subsidiaries and other business units 14
Other cash received relating to investment activities 15
Sub-total of cash inflows 16
Cash paid for acquiring fixed assets, intangible
assets and other long-term assets 17
Cash paid for acquiring investments
18
Net cash received from subsidiaries and other business units 19
Other cash paid relating to investment activities 20
Sub-total of cash outflows
21
Net cash flow from investing activities 22
3. Cash flows arising from financing activities: 0
Cash received from absorbing investment 23
Cash received from borrowings 24
Other cash relating to financing activities 25
Sub-total of cash inflows 26
Cash paid for settling debt 27
Cash paid for distribution of dividends or profit or reimbursing interest 28
Other cash payments relating to financing activities 29
Sub-total of cash outflows 30
Net cash flow from financing activities 31
4. Influence on cash due to fluctuation in exchange rate 34
5. Net increase in cash and cash equivalents 35
Add : Balance of cash and cash equivalents at the beginning of the year
36
6. Balance of cash and cash equivalents at the end of the year 37
Supplementary information: 0
Attached project of cash flow statement 0
1. Net profit is adjusted to cash flow of operating activities 0
Net profit 38
Impairment of assets 39
Fixed asset depreciation, depletion of oil and gas assets and depreciation of productive biological assets 40
Amortization of intangible assets 41
Amortization of long-term prepaid expenses 42
Treatment of losses of fixed assets, intangible assets and other long-term assets 43
Loss on retirement of fixed assets 44
Loss of changes in fair value
45
Finance costs 46
Investment losses 47
Decrease in deferred income tax assets 48
Increase in deferred income tax liabilities 49
Decrease in inventories 50
Decrease in operating receivables 51
Increase in operating payables 52
Others
53
Net cash flow from operating activities 54
2. Investing and financing activities not relating to cash
0
Debt into capital 55
Convertible debt due within one year 56
Finance leased fixed assets 57
3. Net increase in cash and cash equivalents 0
Balance of cash at the end of this period 58
Less: balance of cash at the beginning of this period 59
Add: balance of cash equivalents at the end of this period 60
Less: balance of cash equivalents at the beginning of this period 61
Net increase in cash and cash equivalents 62
Prepared by:
Audited by:
Finance Manager:
Company Leader:
STATEMENT OF CHANGES IN OWNERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
Company: ****** Co., Ltd Items
Amount in this year
Amount in last year Paid-up capital
Capital surplus Earned
surplus Retained earnings Total owners" equity Paid-up capital
Capital surplus Earned
surplus Retained earnings Total owners" equity I. balance at the end of last year - - -
-
- Add: change of accounting policy - - -
- - -
- - Correction of errors in
previous period - - - - - - - - - - II. Balance at the beginning of this year - - - - - - - - - - III. Increase/ decrease of
amount in this year (“-”
means decrease)
-
- - -
(I) Net profit - - -
- - -
(II) Gains and losses directly included in the owners’ equity -
-
1. Net change amount in fair value of financial assets available for sale - - - - - - - - - - 2. Influence of changes in other owners" equity of investors under the equity method - - - - - - - - - - 3. Influence of income tax relating to the owners’ equity project - - - - - - - - - - 4. Others -
-
-
- - - Subtotal of (I) and (II) - - -
- - - - - (III) Input an reduced
capital of owners
-
- - - - 1. Input capital of owners
- -
- - - - 2.Amount of shares included in the owners’ equity - - - - - - - - - - 3. Others -
- -
- - - - - (IV) Profit distribution - - - - - - - - - - 1. Withdrawing earned surplus - - - - - - - - - - 2. Distribution to all
owners (or shareholders) - - -
- - - -
- 3. Others - - - - - - - - - - (V) Internal carrying forward of owners’ equity - - - - - - - - - - 1. Capital surplus transfers to paid-in capital (or share capital) - - - - - - - - - - 2. Earned surplus transfers to paid-in capital (or share capital) - - - - - - - - - - 3. Earned surplus makes up losses - - - - - - - - - - 4. Others
- - - -
- - - - IV. Balance at the end of this period
-
- - - - - Legal representative: Person in charge of accounting: Leader of accounting department:
****** CO., LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2013
(All amounts in RMB Yuan)
I. Company Profile
******* Co., Ltd. (hereinafter referred to as the "Company") is a limited liability company (Sino-foreign joint venture) jointly invested and established by **** Co., Ltd. and ******* Limited on 24 June 2013. On December 26, 2013, the shareholders have been changed to ***** CO., LTD
and ******* LIMITED. Business License of Enterprise Legal Person License No.:
Legal Representative:
Registered Capital: RMB
(Paid-in Capital: RMB
) Address:
Business Scope: Financing and leasing business; leasing business; purchase of leased property from home and abroad; residue value treatment and maintenance of leased property; consulting and guarantees of lease transaction (articles involved in the industry license management would be dealt in terms of national relevant stipulations) II. Declaration on following Accounting Standard for Business Enterprises
The financial statements made by the Company are in accordance with the requirements of Accounting Standard for Business Enterprises, which reflects the financial position, financial performance and cash flow of the Company truly and completely. III. Basic of preparation of financial statements The Company implements the Accounting Standards for Business Enterprises (‘Finance and Accounting [2006] No. 3”) issued by the Ministry of Finance on February 15, 2006 and the successive regulations. The Company prepares its financial statements on a going concern basis, and recognizes and measures its accounting items in compliance with the Accounting Standards for Business Enterprises – Basic Standards and other relevant accounting standards, application guidelines and criteria for interpretation of provisions as well as the significant accounting policies and accounting estimates on the basis of actual transactions and events. IV. The main accounting policies, accounting estimates and changes Fiscal year
The Company adopts the calendar year as its fiscal year from January 1 to December 31.
Functional currency
RMB was the functional currency of the Company.
Accounting measurement attribute
The Company adopts the accrual basis for accounting treatments and double-entry bookkeeping of borrowing for financial accounting. The historical cost is generally as the measurement attribute, and when accounting elements determined are in line with the requirements of Accounting Standards for Enterprises and can be reliably measured, the replacement cost, net realizable value and fair value can be used for measurement. Accounting method of foreign currency transactions
The Company’s foreign currency transactions adopt approximate spot exchange rate of the transaction date to convert into RMB in accordance with systematic and rational method; on the balance sheet date, the foreign currency monetary items use the spot exchange rate of the balance sheet date. All balances of exchange arising from differences between the balance sheet date spot exchange rate and the initial recognition or the former balance sheet date spot exchange rate, except that the exchange gains and losses arising by borrowing foreign currency for the construction or production of assets eligible for capitalization are transacted in accordance with capitalization principles, are included in profit or loss in this period; the foreign currency non-monetary items measured at historical cost will still be converted with the spot exchange rate of the transaction date. The standard for recognizing cash equivalent When making the cash flow statement, cash on hand and deposits readily to be paid will be recognized as cash, and short-term (usually no more than three months), highly liquid and readily convertible to known amounts of cash with insignificant risk of changes in value are recognized as cash equivalent. Financial Instruments
Classification, recognition and measurement of financial assets - The company at the time of initial recognition of financial assets divides it into the following four categories: financial assets measured at fair value with changes included in the profit or loss of this period, loans and receivables, financial assets available for sale and held-to-maturity investments. Financial assets are measured at fair value when initially recognized. Relevant transaction costs of financial assets measured at fair value with changes included in the profit or loss of this period are recognized in profit or loss of this period, and relevant transaction costs of other categories of financial assets are recognized in the amount initially recognized. -- Financial assets measured at fair value with changes included in the profit or loss of this period refer to the short-term sales financial assets, including financial assets held for trading or financial assets measured at fair value with changes included in the profit or loss of this period designated upon initial recognition by the management. Financial assets measured at fair value with changes included in the profit or loss of this period are subsequently measured at fair value, and the interest or cash dividends obtained during the holding period will be recognized as investment income, and the gains or losses of the change in fair value at the end of this period are recognized in the profit or loss in this period. When it is disposed, the difference between the fair value and the initial recorded amount is recognized as investment income, while adjusting gains from changes in the fair value.
--Loans and receivables: the non-derivative financial assets without the price in an active market and with fixed and determinable recovery cost are classified as loans and receivables. Loans and receivables adopt the effective interest method and take amortized cost for subsequent measurement, and gains or losses arising from derecognition, impairment or amortization are included in the profit or loss of this period. -- Financial assets available for sale: including non-derivative financial assets available for sale recognized initially and other non-derivative financial assets except for loans and receivables, held-to-maturity investments and trading financial assets. Financial assets available for sale are subsequently measured at fair value, and interest or cash dividends obtained during the holding period will be recognized as investment income, and gains or losses arising from the changes in fair value at the end of this period are recognized directly in owners" equity until the financial asset is derecognized or impaired and then is recognized as the profit or loss in this period.
-- Held-to-maturity investments: the non-derivative financial assets with clear intention and ability to hold to maturity by the management of the company, a fixed maturity date and fixed or determinable payments are classified as held-to-maturity investments. Held-to-maturity investments adopt the effective interest method and take amortized cost for subsequent measurement, and gains or losses arising from derecognition, impairment or amortization are included in the profit or loss of this period. Classification, recognition and measurement of financial liabilities - The company at the time of initial recognition of financial liabilities divides it into the following two categories: financial liabilities measured at fair value with changes included in the profit or loss of this period and other financial liabilities. Financial liabilities are measured at fair value when initially recognized. Relevant transaction costs of financial liabilities measured at fair value with changes included in the profit or loss of this period are recognized in profit or loss of this period, and relevant transaction costs of other financial liabilities are recognized in the amount initially recognized. -- Financial liabilities measured at fair value with changes included in the profit or loss of this period include the trading financial liabilities and financial liabilities measured at fair value with changes included in the profit or loss of this period designated upon initial recognition. Financial liabilities are subsequently measured at fair value, and the gains or losses of the change in fair value are recognized in the profit or loss in this period.
-- Other financial liabilities: adopting the effective interest method and taking amortized cost for subsequent measurement. The gains or losses arising from derecognition or amortization is included in the profit or loss of this period. Requirements for derecognition of financial liabilities
Financial liabilities shall be entirely or partially derecognized if the present obligations derived from them are entirely or partially discharged. Where the Company enters into an agreement with a creditor so as to substitute the current financial liabilities with new ones, and the contract clauses of which are substantially
different from those of the current ones, it shall recognize the new financial liabilities in place of the current ones. Where substantial revisions are made to some or all of the contract clauses of the current financial liabilities, the Company shall recognize the new financial liabilities after revision of the contract clauses in place of the current ones entirely or partially. Upon entire or partial derecognition of financial liabilities, differences between the carrying amounts of the derecognized financial liabilities and the consideration paid (including non-monetary assets surrendered or new financial liabilities assumed) are charged to profit or loss for the current period.
Where the Company redeems part of its financial liabilities, it shall allocate the carrying amounts of the entire financial liabilities between the relative fair values of the parts that continue to be recognized and the derecognized parts on the redemption date. Differences between the carrying amounts allocated to the derecognized parts and the consideration paid (including non-monetary assets surrendered and the new financial liabilities assumed) are charged to profit or loss for the current period. Recognition and measurement for transfer of financial assets
If the Company has transferred nearly all of the risks and rewards relating to the ownership of the financial assets to the transferee, they shall be derecognized. If it retains nearly all of the risks and rewards relating to the ownership of the financial assets, they shall not be derecognized and will be recognized as a financial liability. If the Company has not transferred nor retained nearly all of the risks and rewards relating to the ownership of the financial assets:
(1) to give up the control of the financial assets to be derecognized; (2) not giving up control of the financial asset to be recognized based on the extent of its continuing involvement in the transferred financial assets and liabilities are recognized accordingly. If the transfer of entire financial assets satisfy the criteria for derecognition, differences between the amounts of the following two items shall be recognized in profit or loss for the current period: (1) the carrying amount of the transferred financial asset; (2) the aggregate consideration received from the transfer plus the cumulative amounts of the changes in the fair values originally recognized in the owners’ equity. If the partial transfer of financial assets satisfy the criteria for derecognition, the carrying amounts of the entire financial assets transferred shall be split into the derecognized and recognized parts according to their respective fair values and differences between the amounts of the following two items are charged to profit or loss for the current period: (1) the carrying amounts of the derecognized parts;
(2) The aggregate consideration for the derecognized parts plus the portion of the accumulative amounts of the changes in the fair values of the derecognized parts which are originally recognized in the owners’ equity.
Determination of the fair value of financial instruments
- If financial instruments trade in an active market, the quoted price in an active market determines its fair value; if financial instrument trade not in an active market, the valuation techniques determine the fair value. Valuation techniques include recent market transaction price reference to the familiar situation and volunteer transaction, current fair value reference to other substantially similar financial instruments,
discounted cash flow method and option pricing model and so on. Test and Provisions for impairment loss on financial assets
--Except trading financial assets, the Company makes assessment on the carrying values of financial assets at the balance sheet date. If there is evidence that the fair value of specific financial asset has been impaired, provisions for impairment loss is made accordingly. -- Measurement of impairment of financial assets measured at amortized cost
If there is objective evidence that the financial asset measured at amortized cost has been impaired, the carrying amount of the financial asset is written down to the present value of estimated future cash flows (excluding future credit losses that have not yet occurred), and the amount of reduction is recognized as impairment loss and is recognized in the profit or loss of this period. The Company carries out the impairment test of significant single financial asset separately, carries out the impairment test on insignificant single financial asset from a single or combination of angles, and carries out the impairment test on single asset without objective evidence of impairment along with the financial assets with similar credit risk characteristics to constitute a combination, but does not carry out the impairment test on the provision for impairment of financial assets based on the single in the portfolio. In the subsequent period, if there is objective evidence that the value of financial asset has been restored and recognized relevant to the objective matters occurring after the impairment, previously recognized impairment loss shall be reversed and charged into the profit or loss of this period. But the book value after the reversal should not exceed the amortized cost at the reversal date of the financial assets supposed no provision for impairment. When the financial assets measured at amortized cost actually occur loss, offset against the related provision for impairment. --
Available for sale financial assets
If there is objective evidence that an impairment of available for sale financial assets occurs, even though the financial asset has not been derecognised, the cumulative loss of decrease of the faire value originally recorded in the owner"s equity should be transferred out and charged into the current profit and loss. The cumulative loss is the initial acquisition cost of available for sale financial assets, deducting the fair value of the withdrawing principal and amortization amount and impairment loss as well as net impairment amount originally charged into the profit or loss. Recognition and provision for bad debts of accounts receivable
If there is objective evidence that receivables are impaired at the end of this period, the carrying value will be written down to its present value of estimated future cash flows, and the amount of reduction is recognized as impairment loss and is recognized in the current profit or loss. Present value of estimated future cash flows is determined through future cash flows (excluding credit losses that have not been incurred) discounted at the original effective interest rate, taking into account the value of related collateral (less estimated disposal costs, etc.). Original effective interest rate is the actual interest rate when the receivables are recognized initially. The estimated future cash flows of short-term receivables have small difference from the present value, and the estimated future cash flows are not discounted in determining the
related impairment loss. The significant single receivables are separately carried out impairment test at the end of this period, and if there is objective evidence that the impairment has occurred, based on the difference of the present value of future cash flows less than the book value, the impairment loss is recognized and the provision of bad debts is done. The significant single amount refers to top five receivable balances or the sum of payments accounting for more than 10% of receivable balances.
If there is objective evidence that the individual non-significant receivables impairment has occurred, separate impairment test is done, the impairment loss is recognized and the provision for bad debts is done; other individual non-significant receivables and receivables not impaired after separate test are together divided into several combinations for impairment testing with aging as the similar credit risk characteristics, to determine the impairment loss and do provision for bad debts.
In addition to separate provision for impairment of receivables, the company is based on the actual loss rate of receivable portfolio with the same or similar to the previous year and aging as the similar credit risk characteristics, and combines the current situation to determine the ratio of provision for bad debts as follows: Aging
Ratio of provision
Within one year 5% 1 – 2 years 20% 2 – 3 years 50% Over 3 years 80% Fixed assets and depreciation accounting method
Recognition criteria of fixed assets: fixed assets refer to tangible assets held for the purpose of producing commodities, providing services, renting or business management with useful lives exceeding one accounting year and high unit value. Classification of fixed assets: buildings and constructions, machinery equipment, transport equipment and office equipment. Fixed assets pricing and depreciation method: the fixed assets is priced based on actual cost and depreciated in a straight-line method. The estimated useful lives, estimated residual rate and annual depreciation rate of various categories of fixed assets are listed as follows: Category of fixed assets Estimated useful lives (year) Estimated residual rate (year) Annual depreciation rate (%) Buildings and constructions 20 10 4.5 machinery equipment 10 5 9.5 transport equipment 5 5 19 office equipment 5 5 19 Impairment of fixed assets: the Company checks the fixed assets term by term at the end of the reporting period, and if the market continuing to fall or technological obsolescence, damage, long-term idle and other reasons result in fixed assets recoverable amount lower than its book value, in accordance with the difference
provision for impairment of fixed assets, the impairment loss is recognized in fixed assets and can not be reversed in a subsequent accounting period. The recoverable amount is recognized based on the fair value of the assets deducting the net amount after disposal expenses and the present value of cash flows of the estimated future assets. The present value of the future cash flows of the asset is determined in accordance with the resulting estimated future cash flows in the process of continuous use and final disposal to select its appropriate discount rate and the amount of the discount. Accounting method of construction in progress
The construction in progress is priced on the actual cost, to temporarily transfer to fixed assets when reaching the intended use state in accordance with the project budget and the actual cost of the project, and to adjust the book value of fixed assets according to the actual cost after handling final settlement of accounts. Acquisition, construction or production of assets eligible for capitalization borrowed specifically or the interest on general borrowing costs and auxiliary expenses of specific borrowings occurred can be included in the cost of capital assets and subsequently recognized in the current profit or loss before the acquisition, construction or production of the qualifying asset reaches the intended use state or the sale state.
Impairment of construction in progress: the Company conducts a comprehensive inspection of construction in progress at the end of the reporting period; if the construction in process is stopped for long time and will not be constructed in the next three years and the construction in progress brings great uncertainty to the economic benefits of enterprises due to backward performance or techniques and the construction in progress occurs impairment, the balance of recoverable amount of single construction in progress lower than the book value of construction in progress is for impairment provisions of construction in progress. Impairment loss on the construction in progress shall not be reversed in subsequent accounting periods once recognized. The pricing and amortizing of intangible assets
Pricing of t...
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