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Read the financial statements and read the audit reports in general reading to understand the opinions of CPA on the statements.

Next, carefully read the various items of accounting statements.

When reading financial statements, you should focus on the following items.

First, the relationship between accounts receivable and other receivables.

If the same amount of the same unit is adjusted from accounts receivable to other receivables, it is possible to manipulate profits.

Second, the relationship between accounts receivable and long-term investment.

If a unit's accounts receivable is reduced, the long-term investment in the unit will be increased, and the amount of increase or decrease will be close, which indicates the possibility of profit manipulation.

Third, the amount of loss to be paid and property to be dealt with.

If the amount of the expenses to be paid and the amount of property to be dealt with is relatively large, there may be a problem of delaying the cost into the profit and loss account.

Fourth, the comparison of borrowing, other receivables and financial costs.

If the company has large other payments to related units,

Lower, indicating that the profit related units may reduce financial costs.

For reasons that everyone knows, listed companies like to play tricks in financial statements.

Because this kind of "trick" is often played out through the way of making false accounts, it is to adjust the profit of this year within the scope permitted by relevant laws and regulations. It does not violate accounting policy and does not violate the law.

When reading financial reports, we should make full use of the information provided in the report, conduct a comprehensive analysis of the company and rationalize the profits announced.

First, make use of the sales adjustment to increase the current profit.

In order to achieve a certain total profit, such as loss or net asset yield, the company will make a false sale before the reporting date, and then return the goods after the date of the report, thereby increasing the profit in the current period.

Second, we should reduce the cost of the current period by postponing the entry time.

The cost is hanged in the "prepaid expenses" subject; the cost of the apportionment is mostly the expenses within one year of the apportionment period, and some amortization period is more than one year. For example, the repair expenses of fixed assets and so on, the time of waiting charge is controlled by the company. Therefore, the part that should be included in the cost should be hung under the subject of the apportionment, which can directly affect the total profit.

It is more difficult for a listed company to make dummy profits in the main business income, but it can affect the total profit through the adjustment of other business income items.

It includes reducing the expenses of the company during the current year with other units willing to bear certain expenses, thereby increasing the profit this year; or pferring or leasing assets to related parties to increase profits; financing loans from related parties and reducing financial expenses.

The new three reserve subjects refer to short-term investment depreciation reserve, inventory depreciation and long-term investment depreciation reserves.

The different treatment of these three projects can make the listed companies adjust their profits in different years.

Fifthly, use other receivables to reduce expenses.

The company reclaims accounts receivable to related enterprises, and records other receivables in the form of short term financing of the entity, and pfers the sum from the book to the other party, so that the receivable turnover rate index will obviously improve, and the provision for bad debts should be reduced at the end of this period, and the cost will be reduced.

Six, use other non recurring income to increase the total profit.

The total profit can be increased through the subsidy income and extra business income of local governments, including fixed assets inventory surplus, asset valuation appreciation and donation.

This method of regulating profits sometimes does not necessarily have cash inflow at the same time, but it can rapidly increase profits.

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