"The magic mirror" causes many big companies to deeply reduce profits

During this year's audit reporting season, the profits of many businesses differed greatly from their self-reported figures, even resulting in additional losses of tens of billions of dong.

Kido Group Corporation (stock code: KDC) after-tax profit decreased by VND18 billion after the first half of the year review, to more than VND57 billion. The company said that the profit decreased due to the adjustment of profit from asset liquidation. As of June 30, the transaction did not meet the conditions to be recorded in this period.

During the period, on June 30, Kido completed the sale of 11.5 million shares at Dabaco Food Processing Joint Stock Company (Dabaco Food), equivalent to 50% of capital. The profit of more than VND 74.8 billion from the transfer was recorded in financial revenue.

After audit, Kido's first half profit only increased by 80% instead of 2.4 times as independently reported.

Another case is Duc Long Gia Lai Group Joint Stock Company (stock code: DLG) whose audited profit decreased by more than 31 billion VND, to nearly 69 billion VND.

According to the explanation, profit decreased by 31% after audit due to a decrease of 30 billion VND in financial revenue due to a decrease in loan interest arising during the period compared to before audit.

Business administration expenses also decreased by nearly VND5 billion due to the company recovering some debts, leading to an increase in the provision for bad debts. Deferred corporate income tax expenses increased by more than VND4 billion due to the exclusion of the provision for financial investments in subsidiaries after the increase in the audit.

Thus, after auditing, Duc Long Gia Lai's first half profit decreased by 13% compared to the same period last year.

The audited first half profit of SMC Investment and Trade Joint Stock Company (stock code: SMC) was also nearly 38 billion VND less than the self-made report, up to a negative 81 billion VND.

The company said the reason for the difference was due to an increase in the provisions for receivables at its member units of more than VND18 billion. At the time the company prepared its own report, these receivables had not yet reached the due date for provisions.

However, at the time of performing the mid-term review report, the auditor determined that it was necessary to make provisions and incurred additional losses due to this provision.

In addition, the company also recorded more than VND 5 billion in expenses due to investment losses at the time of preparing the mid-term review report; expenses for debt cancellation of subsidiary SMC Da Nang of more than VND 18 billion, when SMC Da Nang was carrying out dissolution procedures.

While many businesses saw their profits decrease or even suffered further losses after audits, Construction Development Investment Corporation (DIC Corp - stock code: DIG) made an additional profit of VND21 billion, reaching VND28 billion.

The company said DIG's profit surged after the review due to the fact that most expenses were reduced compared to the self-reported report; financial revenue increased...

With a profit of 28 billion VND, DIC Corp's profit is about 7 times higher than the same period.

Enterprises listed on the stock exchange after announcing their mid-year financial reports will have a review period by the auditing unit.

At this time, the auditor will conduct a review on all material aspects to determine the conformity of the financial statements prepared by the enterprise with accounting standards.

Where necessary, the auditor may also highlight issues to draw readers' attention to the business's outstanding issues.

Therefore, the audit report contributes to ensuring transparency, reliability and accuracy in the financial management of the enterprise.

Source: https://dantri.com.vn/kinh-doanh/kinh-chieu-yeu-khien-nhieu-ong-lon-giam-sau-loi-nhuan-20250906060158566.htm