Financial Services Association, March 21 (Reporter Zhang Chenjing) Following the quick issuance of an inquiry letter by the exchange regarding the*ST Mall (600306.SH) annual report surprise exchange, the China Securities Association also took action. Today, the China Securities Association also issued an annual report audit interview letter to Unitai Zhenqing, the proposed and hired subsequent accounting firm of *ST Mall, reminding them to undertake the company's audit business risks closer to the annual report disclosure date, and requested the accounting firm to explain the progress of the audit of the 2023 annual report of *ST Mall.

Due to doubts about the operating income of *ST Mall and the inability to obtain audit data, *ST Mall Annual Audit Accountants Dahua Certified Public Accountants will issue a non-unqualified opinion on the company's 2023 report, which may trigger mandatory delisting. However, less than a month until the annual report was scheduled to be disclosed, on March 14, *ST Mall's controlling shareholder made an urgent proposal to dismiss Dahua, which had been in service for 12 years, and replace Unitech Zhenqing Certified Public Accountants. On the same night, the Shanghai Stock Exchange quickly issued an inquiry letter on the matter. (For details, see the Financial Services Association's previous report:

(“The holding party suspected that the audit process was “too strict” and proposed to re-elect accountants to the audit committee of listed companies hastily “nodded” and was questioned”)

During the “sensitive season” of annual reports, companies suddenly changed due to differences that could lead to disagreements on delisting matters. *The purpose of ST Mall is self-evident. Today, the China Association of Certified Public Accountants issued an annual report audit interview letter to UNITAI Zhenqing Certified Public Accountants and stated that some listed companies changed their auditing institutions before the disclosure of the 2023 annual report was due to differences with the former certified public accountant regarding accounting processing and audit procedures, and that the former accounting firm was unable to meet the company's annual report audit requirements in terms of personnel arrangements, etc., which attracted market attention. The impact of related matters was significant, and the audit risk was high.

At the same time, the China Note Association suggests that relevant accounting firms should comprehensively consider the customer's business complexity and business risk, and assign an audit team with corresponding qualifications and professional competency to ensure the time and resources necessary to execute the business; when implementing the project quality review, they should evaluate whether the major judgments made by the project team and the conclusions reached in preparing the report are appropriate. Certified public accountants should be diligent and responsible in their practice, fully communicate with former certified public accountants, paying special attention to differences between former certified public accountants and management on important accounting and audit issues, as well as management's integrity; maintain due professional doubts during the audit process, implement necessary audit procedures in strict accordance with audit standards, obtain sufficient and appropriate audit evidence, carefully express audit opinions, and effectively play the supervisory role of accounting firms to promote market operators to improve the quality of accounting information and safeguard the public interest.

Prior to that, in response to an inquiry letter from the Shanghai Stock Exchange, Unitai Zhenqing stated that its audit procedures were not substantially different from Dahua's, and that they would implement stricter audit procedures. Currently, the audit is still in progress. There is significant uncertainty about whether customer contact information can be obtained, and corresponding interviews can be conducted, and the corresponding financial flows can be verified. After implementing further audit procedures, if sufficient and appropriate audit evidence cannot be obtained to resolve concerns, the firm will also issue an audit report that is not unqualified.

According to public information, the proposed change of Unitai Zhenqing Certified Public Accountants in the *ST Mall project was warned and administratively punished by the Ministry of Finance once each in the past three years due to their practice.

It is worth mentioning that *ST Mall currently has multiple financial delisting risks. According to relevant regulations: First, if the company's operating income after deducting business income unrelated to the main business and income with no commercial substance after being audited in 2023 is less than 100 million yuan and net profit (whichever is lower before and after deducting non-recurring profit and loss) is negative, the listing of the company's shares will be terminated. Second, *If ST's latest annual report is issued an audit report with no unqualified opinion, the company's stock listing will be terminated. Third, if the annual report cannot be disclosed as scheduled, the listing of the company's shares will be terminated.

Tonight, *ST Mall announced that the final response documents to the inquiry letter are still being compiled and perfected. It is expected that it will not be possible to complete the response within the original time. After the company applied to the Shanghai Stock Exchange, the company will delay responding to the inquiry letter, which is expected to be extended for no more than 5 trading days.