Is there a situation where "Rui-Yu Coffee" inflates advertising costs?

(3) A comprehensive self-examination of whether there is a situation to match the customer's inflated advertising costs, whether there is a confirmation of advertising revenue, and then other ways to return the customer.Accountants are requested to verify and issue verification opinions.

Reply:After self-examination, the company does not cooperate with customers false advertising costs, there is no confirmation of advertising revenue and then return to customers in other ways, in which the relevant media questioned whether the company as one of the "Rui-Yu coffee" advertising suppliers, whether to cooperate with customers inflated advertising costs, the company carried out a key verification,The details are as follows:

Since 2018, Swiss Coffee has been advertising its elevator and cinema media for brand marketing and product promotion, and the following table shows the company's business dealings with Swiss Coffee over the years:

Up to now, the company has recovered two years and one period of the Swiss coffee sales revenue to achieve the full amount.

In addition to the above-mentioned business, the company and "Rui Yu Coffee" between no other business cooperation, there is no sales collection

Other financial transactions.

Accountants check and express their views:

We have read the company's instructions above and there is no material insoency with the information we received when we performed our audit of our 2019 financial statements.

The main procedures we implement for sales revenue include, but are not limited to:

1understand, evaluate and test key internal controls in the revenue process, evaluate the rationality and effectiveness of the company's internal control design and execution related to sales receipts;

2To assess the general control of the information system environment, the effectiveness of the design and execution of application control and the reliability of the system's accurate and complete processing of transaction data in accordance with business logic, using the work of the information technology experts within the Institute;

3Test the authenticity and accuracy of advertising revenue, including the overall verification of business system data and financial system data, using sampling methods to implement correspondence, check contracts and customer confirmation documents, check bank receipts and other procedures;

4to perform alternative tests on customers who have not responded;

5, sample test ad release details across balance sheet days during the release period, check customer confirmation documents to evaluate whether revenue is recorded in the appropriate accounting period.

In response to the company's sales revenue from Swiss Coffee, we have added a number of verification procedures based on the original audit work, which are as follows:

1, consult all sales contracts and advertising schedules signed by the Company with Ruiyin Coffee for two years and one issue, obtain the schedule records and CTR monitoring reports, and check with the advertising release schedule.

2, export all the insinsining data of Swiss Coffee from the Gold Tax System and check with the customer name of the advertising service agreed upon in the contract.

3, obtain all bank return documents from the company and Swiss Coffee, and check with the collection information recorded on the books.

4To obtain the flow of transactions in the Company's main bank account and to screen for financial transactions with Swiss Coffee and its affiliates in addition to the above-mentioned receipts.

5To compare the discount rate of the second issue of Ruiyin Coffee, select the advertising and publishing customers of similar scale to the scale of Ruiyin Coffee, and compare and analyze the discount rate of the two issues.

Verification Opinion: Based on the above audit procedures, we have not found any significant non-compliance with the relevant accounting standards of the Company in terms of revenue recognition.