--- title: "Multiple audit procedures were non-compliant, PwC received a warning letter" type: "News" locale: "en" url: "https://longbridge.com/en/news/224575466.md" description: "The Guangdong Securities Regulatory Bureau issued a warning letter to PwC Zhongtian Certified Public Accountants and related personnel due to multiple irregularities in their audit work for TOPSCORE FASHION Co., Ltd. in 2022, including non-standard procedures in control testing, fixed asset auditing, and revenue auditing. Specific issues include failure to independently select samples, insufficient identification of equity investment risks, lack of analysis on impairment of idle assets, and neglecting to pay attention to sales return situations" datetime: "2025-01-10T12:12:27.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/224575466.md) - [en](https://longbridge.com/en/news/224575466.md) - [zh-HK](https://longbridge.com/zh-HK/news/224575466.md) generator: "portal-rs" --- # Multiple audit procedures were non-compliant, PwC received a warning letter On January 10, the Guangdong Securities Regulatory Bureau issued the "Decision on Taking Warning Letters Against PricewaterhouseCoopers Zhong Tian LLP, Chen Jianxiang, and Cai Jingmin." The Guangdong Securities Regulatory Bureau conducted an inspection of PricewaterhouseCoopers' audit work for TOPSCORE FASHION Co., Ltd. in 2022. The inspection revealed four major issues with PricewaterhouseCoopers' auditing practices, including non-standard control testing, non-standard fixed asset audit procedures, and non-standard revenue audit procedures. First, the control testing was non-standard. In the control point execution test for inventory write-off approval, PricewaterhouseCoopers required sample quantity and brand but did not independently extract samples; instead, relevant business departments of the company provided samples based on the situation. The working papers for the control points related to sales plan management were inconsistent with the description of the control points. Second, the audit procedures for other non-current assets were non-standard. In November 2022, \*ST TOPSCORE's subsidiary signed an agreement with an individual, Wu, to acquire 8.87% equity in Shenzhen Kuai Meizhuang Technology Co., Ltd. for 40 million yuan, and the prepaid equity payment of 20 million yuan was recorded as other non-current assets. As a result, the ending balance of other non-current assets at the end of 2022 showed significant changes compared to the end of the previous year. PricewaterhouseCoopers did not sufficiently identify the risks associated with this equity investment, failed to design and implement adequate audit procedures, and did not timely identify that \*ST TOPSCORE had not disclosed related party transactions as required. Third, the audit procedures for fixed assets were non-standard. At the end of 2022, \*ST TOPSCORE had temporarily idle assets with a book value of 95.3254 million yuan and had not recognized impairment. PricewaterhouseCoopers did not design and implement appropriate audit procedures to identify and analyze whether there were indications of impairment for the idle assets. Fourth, the revenue audit procedures were non-standard. \*ST TOPSCORE did not accrue sales return amounts for sales revenue from offline stores, Tmall, JD.com, and other channels that were still within the return period. Actual returns occurred in these channels before the company's 2022 annual report was disclosed, and PricewaterhouseCoopers did not pay attention to the return situation in these channels during the audit. There were multiple calculation errors in the working papers for "testing revenue authenticity," and the audit calculation differences were far higher than the materiality level of actual execution, but the audit working papers did not conduct further analysis. According to the relevant provisions of the "Administrative Measures for Information Disclosure of Listed Companies," the Guangdong Securities Regulatory Bureau decided to take administrative regulatory measures by issuing warning letters to PricewaterhouseCoopers, Chen Jianxiang, and Cai Jingmin ### Related Stocks - [603608.CN](https://longbridge.com/en/quote/603608.CN.md) - [300957.CN](https://longbridge.com/en/quote/300957.CN.md) - [002584.CN](https://longbridge.com/en/quote/002584.CN.md) - [603605.CN](https://longbridge.com/en/quote/603605.CN.md) - [688507.CN](https://longbridge.com/en/quote/688507.CN.md) - [300740.CN](https://longbridge.com/en/quote/300740.CN.md) - [09618.HK](https://longbridge.com/en/quote/09618.HK.md) - [002763.CN](https://longbridge.com/en/quote/002763.CN.md) - [300716.CN](https://longbridge.com/en/quote/300716.CN.md) - [301252.CN](https://longbridge.com/en/quote/301252.CN.md) - [688603.CN](https://longbridge.com/en/quote/688603.CN.md) - [02799.HK](https://longbridge.com/en/quote/02799.HK.md) - [002388.CN](https://longbridge.com/en/quote/002388.CN.md) - [002291.CN](https://longbridge.com/en/quote/002291.CN.md) - [09988.HK](https://longbridge.com/en/quote/09988.HK.md) - [EL.US](https://longbridge.com/en/quote/EL.US.md) - [600185.CN](https://longbridge.com/en/quote/600185.CN.md) ## Related News & Research - [PXT: Production guidance nearly doubles for H2 2026, driven by acquisitions and exploration success](https://longbridge.com/en/news/296393798.md) - [We've got a new in-flight Starlink fan: Rick Ross](https://longbridge.com/en/news/296329679.md) - [Nasdaq Futures Plunge as Rising Bond Yields Drive Chip Selloff](https://longbridge.com/en/news/296216952.md) - ['Crazy overvalued': Scott Galloway says SpaceX is a '$10 to $30 stock'](https://longbridge.com/en/news/296229565.md) - [FOCUS-As Europe rearms, Italy's fragmented space sector faces a scale test](https://longbridge.com/en/news/296303505.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**