Audit Report
To all shareholders of Jiamusi Jindi Paper Co., Ltd.:
We have audited the financial statements of Jiamusi Jindi Paper Co., Ltd. (hereinafter referred to as "Jia Paper") for the year ended December 31, 2006, including the balance sheet, income statement, cash flow statement, and notes to the financial statements.
1. Management's Responsibility for the Financial Statements
The management of Jia Paper is responsible for the preparation of the financial statements in accordance with the Accounting Standards for Business Enterprises and the relevant provisions of the Enterprise Accounting System. This responsibility includes:
- Designing, implementing, and maintaining internal controls relevant to the preparation of financial statements to ensure that the financial statements are free from material misstatement due to fraud or error;
- Selecting and applying appropriate accounting policies;
- Making reasonable accounting estimates.
2. Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards for certified public accountants in China. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements due to fraud or error. In making those risk assessments, we considered internal controls relevant to the entity's preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. The audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.