Daxin’s multilateral collaboration brings due diligence work

Hong Yue: At present, the degree of collaboration among our international members is gradually increasing. Initially, there was only bilateral collaboration, and now there are cases of multilateral collaboration. In addition, collaboration cases between international members are also increasing, and these cases basically include 70% of international members.

HY: For example, Chinese members have nearly 200 clients whose stocks are listed in China or Hong Kong, and their parent companies are registered in China. These listed companies have subsidiaries in many other countries outside China (such as Germany, the UK, Israel, Singapore, Australia, Canada, and the United States), so the annual financial statement auditing of these listed companies requires the auditors of the Chinese group to work with local auditors in subsidiary countries (including members of the Daxin network) on an annual basis, as the consolidated financial statements of these listed companies include both the parent company in China and subsidiaries outside China.

These collaborations are mainly carried out in accordance with the requirements of ISAs 600.

HY: ‘The main reason is that the leadership teams of Daxin Network member firms have rich professional experience. For example, Chinese member firms have rich experience of auditing listed companies and of providing consulting services in overseas mergers and acquisitions. Most other member firms such as those in Germany, the UK, Cyprus and Bolivia have leadership teams with experience working for internationally renowned professional companies such as fund management companies and the Big Four. In addition, the leadership teams of Italian and Pakistani member firms have many years of experience in providing CPA training. This enables us to handle most projects related to international business.

HY: The Daxin Network will design suitable service solutions to meet customers' needs, in terms of services, time, and cost efficiency

HY: Due to the different degrees of convergence between local auditing standards and international auditing standards in each Daxin member country, the audit procedures of our network members have certain differences. In addition, due to the differences in the business scale of each member, there is no unified audit software.

HY: In this regard, we have adopted differentiated strategies. For transnational collaboration projects, we adopt a unified audit procedure. For other statutory audit business in each member's local area, it is recommended that each member adopt different audit procedures according to local auditing standards.

‘In addition, regarding audit software, we will recommend the use of appropriate software aimed at large audit firms or small and medium-sized firms, depending on the size of the firm's business.

HY: Here we mainly draw on international auditing standards especially ISA600, IAASB-ISQM, IAASB-ISQM-2, and IAASB-ISA-220.

HY: Daxin network members are mainly involved in: (1) Auditing and consulting in relation to cross-border M&As and investments. (2) Auditing in relation to cross-border IPOs. (3) Cross-border audit work for the annual financial statement audits of listed companies.

HY: The consulting business mainly includes tax due diligence, financial due diligence, acquisition valuation, feasibility strategies, agency services for company establishment and deregistration, and investment compliance consulting.

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