This is the first article of two interpretations of disclosure guidelines issued by Shanghai Stock Exchange(SSE) and Shenzhen Stock Exchange(SZSE) and NEEQ(National Equities Exchange and Quotations) for 3 sub-industries regarding to information transmission, software and information technology industries.
 
Listed companies should implement the guidelines in a complete and clear manner to guarantee that industry information reflects the real business situation especially the business risks.
 
Auditors should pay attention to business information of differents industries during the period of audit in addition to focusing on financial data of the financial statement. Those industries include internet games, internet videos, e-commerce, internet marketing, software and information technology.
 
On the basis of complying to requirements of China Certified Public Accountant Audit Standards No. 1521 and No. 1504, auditors should focus on key audit issues. According to disclosure of 2017 audit report of China main board, key audit issues for software and information technology and internet and relevant service industries include revenue recognition and capitalization of research and development expenditures.
 
Grant Thornton’s industry study focuses on disclosure requirements from perspectives of authorities, listed companies as well as auditors. We will continue to look at information transmission, software and information technology sector in the coming Issue 6.
 
Please read the Chinese version to learn more.