English

By Wang Shen

The China National Audit Office (CNAO) published its audit results for the 2016 financial reports of 35 central stated-owned enterprises (SOEs) on June 20, and most of them have achieved profits.

The CNAO audited the financial conditions, such as revenue and expenditure, of 35 central SOEs, starting from May to June in 2017. The number of companies involved in this audit has increased significantly from previous years.

By the end of 2016, the 35 enterprises had established 12,300 subsidiaries and wholly-owned subsidiaries, and held shares in 2,612 companies, with total assets of RMB 11.65 trillion. They had achieved a total operating income of RMB 4.62 trillion, and most enterprises realized gains.

The 35 central SOEs mainly involve various industries, such as energy, resources, transportation, communication, manufacture, trade and investment, architecture, as well as scientific research and services.

They have continually promoted and deepened reforms, improved their operations management, actively maintained and increased the value of state-owned assets, and made outstanding contributions to the economic society.

They have given full play to their advantages, positively promoted pilot projects and measures for reforms, studied and formulated strategic development plans, strengthened control of important investment projects and the utilization of a large amount of capital, with a goal to further enhance their profitability and prevent risks.

The CNAO adhered to the principles of seeking truth by the law, encouraging innovations and promoting reforms. The CNAO also found some issues that the companies should pay more attention to in the future.

From the perspective of financial management and financial accounting, some companies reported unreliable business performances and did not standardize their financial management. For example, some companies failed to confirm revenues of sales and construction in accordance with the accounting standards and to accurately calculate the costs and expenditures, which resulted in overestimating or underestimating their profits.

Regarding their operations management, some companies were still weak at operational controls, which caused capital losses and risks. Their measures to deepen the reforms of state-owned enterprises have not been more effective.

To help solve these issues, the CNAO will further track and supervise the corrections of the problems, and actively promote and establish a long-acting correction system. It will help to determine the reasons for the issues, and design specific and feasible plans.