Company Reports Profit but Actually Suffers Heavy Losses: Reality & Consequences

In a volatile economic landscape, financial transparency is crucial for maintaining investor trust. However, Thang Long Thermal Power JSC recently attracted attention after its financial report showed a profit of 122 billion VND, when in reality, it had suffered a loss of over 528 billion VND.

Financial Situation of Thang Long Thermal Power JSC

Financial Report and Miscalculation

According to its 2023 financial report, Thang Long Thermal Power JSC initially announced a profit of nearly 122 billion VND. However, after revision, the company admitted to mistakenly using figures from 2022 instead of 2023, leading to the incorrect profit report. In reality, the company recorded a loss of more than 528 billion VND in 2023.

Continuous Business Losses

• 2022: Reported an after-tax loss of over 528 billion VND.

• First half of 2024: Reported an after-tax loss of nearly 458 billion VND.

Despite continuous financial losses, the company still issued multiple bond offerings, raising nearly 1.8 trillion VND.

Thang Long Thermal Power: A testament to resilience, drawing significant bond interest despite operational challenges, captured under a vibrant sky.

Consequences of Incorrect Financial Reporting

Loss of Investor Trust

Company Reports Profit but Actually Suffers Heavy Losses. Inaccurate financial reports can cause a severe loss of investor confidence, making it harder for businesses to raise capital in the future.

Legal and Regulatory Risks

Companies may face penalties from regulatory agencies. For instance, Rạng Đông Holding JSC was fined 150 million VND for publishing false financial information (Source).

Solutions for Enhancing Financial Transparency

Strengthening Internal Controls

Implementing strict internal control mechanisms can help detect and prevent errors in financial reporting.

Hiring Independent Auditors

Partnering with reputable auditing firms ensures the accuracy and transparency of financial statements.

Employee Training and Capacity Building

Providing training programs on accounting standards and professional ethics helps reduce human errors in financial reporting.

Conclusion

Incorrect financial reporting damages corporate credibility and carries severe legal and financial consequences. To maintain investor trust and financial stability, businesses must prioritize accuracy and transparency in their financial disclosures.

Source: tienphong.vn