Audit Report
To All Shareholders of Dongfang Wangli Technology Co., Ltd.
- Inability to Express Opinion
We accepted the engagement to audit the financial statements of Dongfang Wangli Technology Co., Ltd. (hereinafter referred to as "Dongfang Wangli" or "the Company") for the year ended December 31, 2020, including the consolidated and parent company balance sheets, consolidated and parent company income statements, consolidated and parent company cash flow statements, consolidated and parent company statements of changes in equity, and related notes to the financial statements. We do not express an audit opinion on the accompanying financial statements of Dongfang Wangli. Due to the cumulative impact of multiple interrelated uncertainties described in the "Basis for Inability to Express Opinion" section and the significance of other matters, we were unable to obtain sufficient and appropriate audit evidence to provide a basis for an audit opinion on the financial statements.
- Basis for Inability to Express Opinion
(1) Opening Balances
We performed relevant audit procedures on the opening balances. Due to historical reasons, changes in management, the departure of key personnel, and the internal control situation of financial reporting, we were unable to obtain sufficient and appropriate audit evidence regarding whether the opening balances had a significant impact on the financial information for the current year. We cannot determine whether the prior errors necessitating retrospective restatement of the opening balances have been fully addressed, nor can we assess the extent of the impact of the aforementioned circumstances on the opening balances and comparative data from the previous period.
(2) Audit Limitations
Due to historical reasons, the internal control situation of financial reporting, the departure of key personnel, and the inability to provide multiple important documents, we were unable to implement effective confirmation, observation, and inspection procedures necessary for the audit. We cannot determine whether there are significant misstatements in the relevant financial statement items or the completeness and accuracy of the disclosures in the notes to the financial statements.
(3) Other Significant Uncertainties
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Dongfang Wangli is involved in numerous lawsuits due to financial shortages, inability to repay due debts, and illegal guarantees. However, due to the complexity of the litigation and the uncertainty of the outcomes, we were unable to obtain sufficient and appropriate audit evidence regarding the accuracy and completeness of the litigation matters, nor could we implement audit procedures to assess the potential impact of the litigation on the Company's financial statements. We also could not obtain audit evidence to determine whether Dongfang Wangli has other undisclosed illegal guarantees, fund occupation matters, or other contingent matters, nor could we obtain sufficient and appropriate audit evidence regarding the accuracy and completeness of the disclosures related to these matters. We did not obtain the necessary audit evidence to determine whether the related parties involved in these matters exist, thus we cannot obtain sufficient and appropriate audit evidence to ascertain the accuracy and completeness of related party and related party transaction disclosures.
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The matters disclosed in the previous year's audit report that were retained have not been resolved, and their impact on the financial statements continues into the current period. We were unable to obtain sufficient and appropriate audit evidence to determine the impact of these matters on the current financial statements.