Introduction: The audit site of a state-owned listed company.
Audit Manager: Manager Liu, you are the person in charge of the **chain department, may I ask our company's ** model self-operated or **ah?
Manager Liu: We are self-employed, absolutely self-employed, for so many years, we have always been self-employed.
Audit Manager: But oh, I see that the company has signed a contract with ** businessmen and customers, and the delivery location is at a wharf in Wuhan, and the cargo space at this wharf is rented by our company
Manager Liu:No, because we are not a first-hand businessman, the dock space is not rented by us
Audit Manager: Huh?Does the company keep the delivery bill?
Manager Liu: We don't have the original pound listWe have a statistical statement of the pound bill stamped by the dock to usIt took us a lot of effort to get the other party to stamp it to us, and the other party is also a state-owned enterprise, which is very difficult to communicate!
Audit Manager: I know, Manager Liu, the contract is still stipulated**The delivery method is self-pickup, and the delivery method we deliver to customers is also self-pickup, and the terminal costs before delivery and the risk of inventory loss are borne by customersAre we actually involved in the delivery process of the goods?
Manager Liu: We participated!We are involved in the form of contracts and notices of goods rights, and we have also received the customer's money, and we have also paid the money of the businessman, which is all real business, and the financial manager Zhang has confirmed
Audit Manager:Even the contract is locked, which means that the company does not bear the risk of inventory and earns fixed profits, which should not be a self-operated model, but a ** model, which should be recognized by the net method
Manager Liu: (nervous) No, no, listen to me, we are self-employedFinance Manager Zhang said, we are the total amount method confirmation, not the net method, we have done not do well, we will change, but we are indeed the total amount method, we do have many places to do not do well enough, not perfect enough, so that you think it is the net method, we are now reflecting, we will change
Audit Manager: Ah, Manager Liu, this is not your problem, Manager Zhang may not know the specific situation, the company is the first model to confirm according to the net method, as long as the first business is confirmed.
Manager Liu: (excited).It's not good for us to do well, we're really reflecting, the SASAC, the Securities Regulatory Commission, the Finance Bureau, the Audit Bureau are all investigating, the financial manager Zhang also put forward a lot of requirements with us, and finally we are the work of the business personnel, the leadership is also very angry, let us work overtime to supplement the materials, change the contract, I myself am also very confused, do more than ten years of bulk commodities** It has always been to let the company take the least cost and take the least risk to make profits, but now it is scolded by the leader to the blood, which link is the problem?Or is it a problem of its ownShouldn't you do it?I'm going to change my career!?
Audit Manager: Uh, Manager Liu, you calm down, it's not your fault.
Seeing this, everyone must also ask this question:
Is the business guilty?Why should external regulation be so targeted at the best business?
This has to start with the origin and history of **.
First, the aggrieved debut
More than 2,000 years ago, when China was still in the Warring States Period, the Great Liang of the Qin State in the west wrote a "Book of Shang Jun", saying: BothThe name is easy to trade, not to be overlooked. (Trade, trade: originally meant exchange, here refers to reversal).
As a representative figure of Legalist thought among the hundreds of scholars, one of his basic ideas was to emphasize agriculture and suppress business, and he advocated cracking down on the commercial behavior of "exchanging the best for the best" in order to maintain the national strategy of combining agriculture and military.
But, paradoxically, "The name is easy to tradeCombined into **,The first time the term was included in Chinese historical documents, it turned out to be in the form of a derogatory term, and it was the target of the attack, which can be regarded as quite aggrieved.
Second, enduring
Bartering and bartering for money has been an enduring economic behavior of human beings since ancient times.
Ancient and modern, Chinese and foreign, no exception.
(1) Abroad**
Everyone knows that Jews are known for their ability to do business, but in fact, indigenous Europeans also have a tradition of doing business, such as the Italians, and the city-state of Venice has always been a place of merchants, and double-entry bookkeeping was born in the small town of Tuscany in Florence.
In the 11th century, the spices and silk of the East were introduced into Europe, and were sought after by the European aristocracy and the rich, spices ** became a lucrative business, with profits as high as 20 times, Constantinople on the Eurasian border rose, the Arabs monopolized the spices**, and the European city-states united with the pope to encourage the priests and knights, in the name of God, to vow to take back the spices and wealth, and by the way help God to increase the number of believers, which led to several crusades, which went through hundreds of years.
The North American War of Independence was also triggered by tea**, the suzerainty at the time, the British authorized the East India Company to monopolize North American tea**, and announced that it would raise taxes, causing dissatisfaction among the local tea merchants in the North American colonies, tea merchant Adams took the lead in resisting taxes, dumping tea into the sea, Britain announced the arrest of Adams, and then broke out in the town of Lexington.
In addition, the white slaves and black slaves that have occurred successively in the history of Europe and Africa are inhumane, but the development of the first can also be seen.
Throughout the history of the world, ** with the expansion of human civilization, the network has spread all over the world, and it has endured.
(2) Domestic**
In China, the origin of commerce can be traced back to the Zhou Dynasty, when the remnants of the Yin merchants lost their political power and land resources, and lacked agricultural skills, so they had to run and sell for a living, so they were called "merchants", and this title has been maintained to this day.
In the Spring and Autumn Period, the State of Qi relied on the business acumen of Xiangguo Guan Zhong to surpass the business acumen of his contemporaries, and developed industries and commerce such as fishery, salt industry, and smelting, which made the internal society of Qi stable, the country rich and the people strong, accumulated a strong material foundation and military strength, and finally dominated the Central Plains.
During the Han Dynasty, the land Silk Road was filled with smoke and dust, and a steady stream of oriental specialties such as silk, spices, and porcelain passed through the desert of the Western Regions, crossed the Tianshan Mountains, and walked out of the Alxa Pass, and were sent to the living rooms of European nobles and wealthy by Arab camel caravans.
During the Tang Dynasty and the first century, the national strength reached its peak, and all kinds of ethnic groups in Eurasian countries used strange words to sell strange commodities at home and abroad in Luoyang, the capital of the gods.
In the Song and Yuan dynasties, due to the war in the north, the Mongols rose and blocked the land Silk Road.
Even in the Ming and Qing dynasties, except for tribute, the sea was strictly prohibited, but the activities of the people have not been interrupted, but they have just deviated from the normal track.
Since the reform and opening up, China has made remarkable achievements at home and abroad.
According to the data of the Ministry of Commerce of the People's Republic of China
In 2018, China's total import and export of goods accounted for 11 percent of the global share8%。
In 2021, the total value of goods** reached 605 trillion dollars.
Therefore, business is an important part of human economic historyIt is a matter of concern for the well-being of all mankind
* The reason why a business is enduring naturally has its own internal driver, that is, business logic.
3. Business logic
Taishi Gong said: The world is bustling, all for profit;The world is crowded, all for profit.
This statement shows the business connotation of the business, the essence of the business is to make profits, take advantage of the difference between regions and information asymmetry, and earn profits, which is the basic business ethics of the business.
With the continuous expansion of business behavior, business subjects, and commodity content, the number of people and regions that carry out first-class business is becoming more and more concentrated, so there are people who make a living from first-class business, that is, first-class business;The area where the first merchant concentrated trading appeared, that is, the bazaar, and later evolved into the city.
At this time, the ** business still belongs to the traditional category of using the market to make profits.
It is not until the entry of capital into the field of ** and the revision of modern accounting standards that the traditional ** is deformed.
Fourth, deformation**
(1) Financing**
I don't know when it began, there were large businessmen in the market who took advantage of the line and convenience of bank credit to generate capital advantages, and were no longer simply satisfied with the difference in commodities, but took advantage of the short-term funding gap between the two sides of the transaction to provide funds to earn interest, that isIn the name of **The fact that the bank borrowed funds, famousFinancing**I appeared.
There are two main ways to operate the financing **:
It does not participate in the physical circulation at all, and the certificate of transfer of goods such as warehouse receipts or bills of lading is essentially a pledge of the certificate of transfer of goods, providing funds for lending, and collecting interest, which is reflected as ** profit;
Participate in the physical circulation, the first merchant will generally purchase goods from the first merchant according to the procurement content specified by the customer, and sell it to the customer, which is still a capital pallet in essence, and the merchant does not bear the risks associated with the transfer of goods, and only charges a fixed profit, and the fluctuation of the commodity will not affect the profit of the merchant.
Financing ** dressed in the coat of **, actually engaged in capital lending, disguised to assume the function of a bank, but not subject to direct financial supervision, become an unsupervised financial profit-seeking behavior, do not underestimate human greed and madness, human history countless painful experience tells us that the only end of this behavior is the rapid destruction after madness.
Therefore, the financing ** creates a false prosperity, which will eventually infinitely amplify the financial attributes, and once the risk appears, the consequences are unimaginable.
(b)**
* business use of market information asymmetry, for the two sides of the transaction to provide intermediary services, according to a certain proportion of the transaction turnover to charge a fee, since ancient times reasonable and legal, ancient China called "tooth line", ancient Europe called "guild", so, **style ** reasonable and legal, there is no problem.
However, when some ** merchants are engaged in ***, the contracts signed with the upstream and downstream are normal purchase and sale contracts, and the contract form is not abnormal, which gives rise to the problem of revenue recognition in accounting
Does the merchant recognize the revenue in full according to the sales contract signed with the customer, or does it recognize the revenue according to the **fee?
Prior to 2017, this issue had been plaguing the accounting profession, and different companies had different accounting treatments.
Finally, on 5 July 2017, the Ministry of Finance issued the revised Accounting Standard for Business Enterprises 14 Revenue, which converges with the IASB's May 2014 IFRS 15 Revenue from Contracts with Clients.
The revised new revenue standard stipulates that an enterprise should determine whether it is the principal responsible person or the first person to engage in the transaction based on whether it has control over the commodity before transferring it to the customer. If an enterprise is able to control the commodity before transferring it to a customer, the enterprise is the main responsible person and shall recognize the revenue according to the total consideration received or receivable;Otherwise, the enterprise is a ** person and should recognize revenue according to the amount of commissions or handling fees that it is expected to be entitled to.
At this point, contracts that are essentially models, including financing, can only recognize revenue according to the net method.
5. Current situation and reflection
However, in order to complete the target of operating income, some companies must turn the ** model into a self-operated model, and turn the financing ** into a self-operated **, in order to formally meet the total amount method, or even for the purpose of fictitious operating incomeUse purchase and sale contracts, bills of lading, invoices, "orders", "idling", and use upstream and downstream related party companies to circulate transactionsetc., the traditional ** is distorted and deformed, and the so-called **chain finance, private network communication business and other various forms of ** appear.
In short, these companies don't want to take real risks, but they also want huge revenues on their income statements!even deliberately disguised himself as a link in the chain!
So there is the scene at the beginning of this article: the business people are surrounded by enemies, aggrieved, and feel that they let the company invest the least cost, bear the least risk, and make money by doing business, but they are doing something wrong and need to reflectBut is the person who should reflect on it be the business manager Liu?
Flipping through the annual reports of A-shares and the audit reports of local financing platforms, it can be seen that the business model of many state-owned enterprises in China is "real estate + bulk commodities" or "other main businesses + bulk commodities" It can be reasonably inferred that before the introduction of the regulatory policy to restrict real estate financing, the bank credit and convenience of the real estate industry provided a large amount of funds for financing, and the identity of state-owned enterprises itself was easy to obtain bank financing, so financing ** took advantage of these "idle" funds, earned interest income, and at the same time "rolled" the operating income, it is simply a triple win!
Beautiful, my big ** income!
With the huge operating income increasing year by year, the performance of state-owned enterprises is getting higher and higher, entering the top three in the city and the province, and finally entering the world's top 500 without exception
But a careful study of its annual report, between the lines is full of commodity ** chain, real estate and finance, excuse me:
Does the company have high-tech talents?
Is there a core technology?
Do you have a core competitiveness?
The answer, of course, is no.
Musk's rocket has been able to **, and many domestic state-owned enterprises are still pouring coal!
It's not impossible to dump coal, but is it possible to collect it?
As early as 2013, the State-owned Assets Supervision and Administration Commission (SASAC) issued the "Emergency Notice on Further Strengthening the Risk Prevention of Bulk Commodity Business of ** Enterprises" and the "Notice on Carrying out a Thorough Investigation of Risk Steel Trade Business", which strictly prohibits the financing business of no commodity in kind, no right to transfer goods or in-situ transfer.
However, the deformation has a quick effect, the form is becoming more and more complex, and it has become more and more intense.
On October 12, 2023, the State-owned Assets Supervision and Administration Commission (SASAC) issued the "Notice on Regulating the Management of Enterprises and Strictly Prohibiting All Kinds of Falsehoods", proposing the "Ten Prohibitions" requirements for enterprises to carry out business, further delineating false forbidden areas and standardizing business management.
The harsh wording and meticulous requirements in the article are rare in history, which is enough to show that the regulators have a deep hatred for false **.
So,It is the management of those state-owned enterprises that really needs to be reflectedUnder the trend of strong supervision, we should give up illusions, proceed from reality, de-financialize as soon as possible, rely on the characteristics of the local economy, deepen the main business, and use the technological innovation of the real economy and manufacturing industry to truly open up the front and back ends of the industrial chain, and become a professional production, supply and marketing integration company.
6. Audit response
In view of the deformation of financing, the focus of the audit response is commercial reasonableness, and the core content is to verify the money, goods, and transaction subjects.
First of all, it is necessary to judge the commercial reasonableness.
Combined with the first contract, analyze the risk bearing of each trading entity, whether the business is related to the company's main business, whether the gross profit margin is reasonable, and whether it complies with the provisions of accounting standards.
Generally speaking, deformations such as financing tend to have low gross profit margins, do not bear inventory risks, have no pricing power, and have nothing to do with the company's main business, and usually do not actually participate in physical circulation.
Second, verify the money.
Whether the funds are abnormal, whether they match the bank loans, whether they bear the credit risk of the customer, and whether the receipts and payments are true and normal.
Generally speaking, companies engaged in financing and other deformations often have capital channels such as bank loans.
Then, verify the object.
Verify whether the flow of goods is true, verify the details of logistics and transportation, the details of physical delivery, whether the company is truly involved, whether the original documents are true, whether the authenticity of the transaction is proved, and whether the transfer of practical control indicates that the company has assumed the inventory risk.
Generally speaking, companies engaged in financing and other deformations often do not participate in the physical circulation, do not manage the physical goods, do not undertake transportation, and only rely on contracts, invoices, bills of lading and other forms of information to "do business".
Finally, verify the subject of the transaction.
Pay attention to whether the upstream and downstream trading entities have business qualifications and capabilities, whether they are related, inquire about public information, and pay attention to whether there is abnormal industrial and commercial information, such as proximity of registered addresses, the same **, etc.
Generally speaking, companies engaged in financing and other deformations are likely to look for related party companies to cooperate, or even collude with other listed companies to "roll" each other's income, which should be carefully screened.
For details, please refer to: issued by the Financial Supervision Bureau of the State-owned Assets Supervision and Administration Commission to accounting firms in 2017"Audit Recommendations for Financing ** Business" and "Audit Recommendations for ** Business Without Commercial Substance" such as "Idling" and "Order Taking", as well as"Beijing Stock Exchange Review: Summary of Inquiries from the Beijing Stock Exchange on ** Business in 2023".