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1、Listed companys financial fraud in Dialysis Abstract since the 20th century, 90 years, Chinas listed companies as well as the worlds financial fraud has become increasingly active investors and related financial information users has brought serious losses, but also have a great impact to the capita
2、l markets. Multi-Perspective should be listed on the companys financial fraud, to conclude his corrupt means to stop and reduce financial fraud. Key words listed company; financial fraud; governance mechanisms; asset restructuring of professional ethics First, Chinas listed companies a common means
3、of financial fraud Financial fraud is the subject of financial fraud in the accounting information processing and reporting process, in order to obtain improper economic benefits, using deceptive means to intentionally misrepresent the nature and substance of financial facts important to the illegal
4、, and discipline. Chinas listed companies experienced financial fraud that concealed from the public, from single to multiple, ranging from fraud to focus on the end of a continuous, uniform, systematic fraud, from the unreal to the real account the process of writing a cook the books. 1. The use of
5、 inappropriate accounting policies and accounting estimates fraud. For the same transactions or events are often a variety of alternative accounting treatment, combined with Chinas specific accounting standards have not yet involved in all aspects of corporate accounting, many listed companies on th
6、e use of accounting policies and accounting estimates and changes to manipulate the choice of the profit a false appearance of operating results. (1) the cost of borrowing the improper selection of accounting methods. According to the Chinese Accounting Standards requirements, interest incurred on b
7、orrowing costs, exchange gains and losses and related charges financial institutions, in the planning took place during the acquisition of the asset has nothing to do with long-term borrowing costs may be capitalized and included in these long-term assets the cost of long-lived assets to be put into
8、 use, are charged directly to current profit and loss. However, the number of listed companies on the adoption of the accounting treatment of borrowing costs of abuse to regulate the profits. (2) to adopt an improper method of accounting for equity investments. Chinese enterprises have long-term inv
9、estments Accounting Standards detailed provisions on accounting: When the investment in business investment in the invested enterprise to satisfy certain conditions, such as the control, joint control or significant influence should be using the equity method; and vice versa using the cost method .
10、However, many companies in this start an article on the two methods, when the investment company was a profit, should not be using the equity method of investment by the equity method, when the losses were investment companies, the equity method to use another accounting change cost method. (3) to a
11、dopt an improper method of depreciation. To extend the depreciable life, from accelerated depreciation method to straight-line method, or even not to mention depreciation inflated profits in practice not uncommon. (4) improper use of revenue, cost confirmation. Listed companies in order to maximize
12、profits or smoothing profits or assets are usually the product of the risk or reward is not fully recognized before the transfer of sales operations and other assets, the transfer of income. (5) the merger of the improper selection of the policy. With the long-term equity investments are included in
13、 the corresponding accounting statements for the merger of the scope of consolidation, so companies often by changing the scope of consolidation to regulate the profits. 2. The use of spin-off and simulation Accounting Innovation fraud. Divestiture and corporate restructuring and the simulation is l
14、isted attendant. In the administrative examination and approval system, due to implementation of the scale of control and limit the number of reported family policy, issuance of shares amount to become a very scarce resource. Enterprises through fierce competition to get the amount of stock offering
15、s often do not match the size of their assets had to be part of the business and operating assets stripping, or making partial restructuring, originally did not have an independent market-oriented capacity production line, workshop, or a number of operational put together into a listed company and,
16、through the simulation to the preparation of these non-independent accounting units of the accounting statements. Peel and simulation in the development of Chinas securities market contributed, if not allowed to peel and simulation, and many enterprises (especially state-owned enterprises) are eligi
17、ble do not have listed it is not possible through the joint-stock reform and listing out of the dilemma. On the other hand, stripping and simulation like cosmetic surgery, by bad assets, liabilities and related costs and hidden stripping can easily simulate the loss-making enterprises into profit-ma
18、king enterprises, stripping and simulation affect the authenticity of accounting information. 3. Utilization of assets, restructuring and related transactions fraud. In theory, the reorganization of assets, related-party transactions and financial fraud are not necessarily linked, if the asset restr
19、ucturing and related transactions had indeed been to fair pricing, and in the statements and the notes required by accounting standards have done a proper disclosure of , no information users would be misleading. But in fact, many of the assets of Chinas listed companies restructuring and related-pa
20、rty transactions have adopted the principle of pricing agreements, pricing depends on the level of the companys needs, making profits can be transferred between related parties. This reorganization of assets and related party transactions has become a very important and common means of financial fra
21、ud, such as radio and television shares, Shaanxi Changling, Bird stake. 4. Local government aid fraud. At present, the use of listed companies to raise funds to promote regional economic development has a very important role. So fight for the listed indicators is difficult, Shell Resources tight bud
22、getary situation, many local governments often can not bear to see listing of indicators set aside, so that listed companies have lost valuable funding eligibility. Thus, some local governments have extended to listed companies, helping hand, using tax incentives, financial subsidies in the form of
23、helping companies to achieve a certain profit targets are often a huge amount of these subsidies and the lack of justification. Such local government aid for the number of listed companies to manipulate profits, glossing over the financial statements opened the door. 5. Fictitious economic business
24、fraud. (1) The fictitious sales. Fictitious sales, its nature is the most serious and most difficult to review one of the methods of fraud. Guangxia represented as in the listed companies in order to fictitious sales are from the original sales contract a full set of false start; dawn fictional acts
25、 of shares is 100 dense non-sparse, that is, with affiliates or non-affiliated enterprises outside the in the form of value-added tax invoices, fictitious purchase and sale business, in the case of value-added tax to avoid inflated revenues and profits. (2) fictitious asset valuation. False asset va
26、luation, including the assets without formal procedures for project evaluation, nothing improper asset evaluation and assessment. Joan China source on the right does not have full ownership of the assets assessment, to confirm the huge capital surplus. Second, to the listed companys financial fraud
27、Reflection Listed companys financial fraud is not only to investors, creditors can not recover the loss, seriously affecting the companys image, worthy of our thought. 1. Governance mechanisms of the defect correction cut a loss of a variety of measures of immunity. Sound corporate governance mechan
28、ism is to ensure high-quality accounting information, internal institutional arrangements, often including the board of directors operational efficiency and internal control structure. However, many listed companies used to ensure the authenticity and integrity of financial information, corporate go
29、vernance there is a fatal flaw. In China, the current shareholding structure of listed companies, the state shares, legal person shares accounted for an absolute proportion (National owner of a long-term absence), small and medium investors in the stock market is on the vulnerable groups, listed com
30、panies, investors and the management of the existence of serious information asymmetric addition, listed companies in China accounted for the vast majority of the board of directors within the board structure is irrational, leading to power imbalances. Internal control and make corporate governance
31、constraints and incentive mechanisms completely lose the effectiveness of such a corporate governance structure not only undermine the interests of small shareholders, but also undermines the major shareholders own interests. Contribute to a variety of measures to establish a sound internal control
32、error correction to protect the security of assets, to ensure the authenticity and reliability of financial information. However, Chinas current internal control practices are many of the content is very principles, practical operability relatively poor, the lack of standardized specifications and f
33、ailure will affect the validity of. Furthermore, China has a large number of mergers and acquisitions among enterprises, the rapid expansion of business scale and business become increasingly complex. Many executives tend to focus development, than on management ideas, which led to mergers and acqui
34、sitions in the management system, information systems, internal control, personnel policy, etc. can not effectively integrate with the acquirer and optimization, and weakens the organizational control and internal control, in order to exceed the executives engaged in internal controls and financial
35、fraud conceals potential problems. Reposted elsewhere in the paper for free download http:/ 2. The lack of independence and work ethic led to a significant source of audit failure. If internal audit is to ensure true and reliable accounting information of the first gate, then an independent audit is
36、 to prevent any significant accounting errors and fraud in the last line of defense. Certified Public Accountant in order to avoid an audit failure and litigation, the most basic thing is to hard inner strength, focus on updating and accumulation of knowledge, strengthen personal and professional et
37、hics and professional competence of self-cultivation. In the course of their practice, we must fully understand the basic situation of Beishendanwei including customer management, conduct, internal management institutions, and financial officers suffered abnormal pressure, when the unit is in financ
38、ial difficulties during the trial, especially to be ST or PT when special attention, there must be reasonable suspicion of ideology, is not superstitious customers, always pay attention to the trial unit changes and their reflection of the outside world, with particular emphasis on key clients to co
39、llect information, be very careful when you express an audit opinion, Do not destroy his own interest for the moment individual, firm, and even the industry future! The same time, the signature of Certified Public Accountants and their families and property declaration system implemented to prevent
40、improper trading by certified public accountants for listed companies or the interests of making improper audit of the incidence of rent-seeking behavior; to strengthen the follow-up education and training sector will be of professional ethics, integrity education as the main content, so that each o
41、ne to join the CPA profession is bear in mind the Chinese State Council Premier Zhu Rongji proposed forward a pre-Guidelines: honesty, integrity as the most important, follow the guidelines and did not make false accounts to gradually abandon the one night rich-quick mentality, and gradually establi
42、sh the correct values of practitioners. 3. Can not only attach importance to the institutional arrangements to the neglect of the integrity of all-round education. The securities market is full of opportunities and temptations of the game sites, through institutional arrangements of the participants
43、 and regulators to constrain and deterrence. The system, congenital defects can not be met into the reality of all the circumstances that may arise, and therefore can not be pre-rule provisions in a limited one-time listing of all need to follow terms. If the securities market participants and regul
44、ators do not speak integrity, institutional arrangements would be looked pale and weak. When the huge economic interests and a serious ethics collide, only the subtle influence the integrity of education in order to tip the balance inclined to ethics. Listed companys financial fraud that faith educa
45、tion should be comprehensive. Registered accountants need faith education, lawyers, securities analysts, investment banks, credit rating agencies, as well as small and medium investors and other participants in the securities markets, government officials, regulatory agencies and the media such as t
46、he securities market watchdog, but also the need for faith education. The main functions of financial accounting is a true reflection of a particular economic environment subject to their economic relations. Therefore, the quality of accounting information by the financial accounting in which enviro
47、nmental constraints. If you do not clean through the faith of accounting education, the environment, even if the financial accounting system and then complete the provision of financial information are also bound to be distorted. At present, around the world to varying degrees of financial fraud, ar
48、e a concrete manifestation of lack of good faith are violations of professional ethics of accounting behavior. Only by carrying out all-round education, the integrity of the whole society in order to eradicate this chronic problem of financial fraud. 4. Restatement of financial statements of financi
49、al fraud system is a magic mirror, it is worth learning and promotion. US-listed companys financial fraud storm system began to restate the financial statements drawn greater attention. Restatement of financial statements of the U.S. system, provided that if the listed company of fraud, serious violation of generally accepted accounting principles or a major accounting errors, leading