The Dalian bureau of the China Securities Regulatory Commission has imposed a total fine and confiscation of 4.4 million yuan on Lixin Zhonglian Certified Public Accountants for failing to perform due diligence in its audit of Zhiyun Co.'s 2022 annual report. An investigation found that Zhiyun Co. had fraudulently recognized sales revenue of 59.7345 million yuan and profit of 24.1123 million yuan from its subsidiary Jiutian Zhongchuang and Jiangxi Mizan, accounting for 13.27 percent and 7.09 percent of the absolute values of the reported operating revenue and total profit for the same period. Lixin Zhonglian issued an audit report containing false records. Its audit service revenue of 1.1 million yuan was confiscated, and an additional fine of 3.3 million yuan was imposed. The signing certified public accountants Liu Xinfa and Zhao Hongrui, along with project quality reviewer Yang Mingshu, were also given warnings and fined 800,000 yuan, 400,000 yuan, and 200,000 yuan respectively.
Dalian Zhiyun Automation Co LtdZhiyun Co. was found to have fraudulent revenue recognition; its auditor was fined, indicating regulatory scrutiny and accounting issues at the company.