1、Reasons and countermeasures of listed companies financial fraud Pick to: financial fraud accompanied by Chinas reform and opening process and continuous development, bring social harm is more and more apparent, whether to financial fraud effective management by the peoples widespread concern. On the
2、 listed companys financial fraud concepts and methods were summarized, from the interest drive, corporate governance, accounting personnel occupation moral standards, accounting and auditing system, in-depth analysis of the causes of financial fraud, and in view of the above reasons put forward the
3、corresponding control measures Key words: financial fraud； reasons； control countermeasures； listed company Introduction Since the beginning of Enron in late 2001, cases of financial fraud in listed companies at home and abroad frequently burst out. In early 2006, the Shanghai national accounting In
4、stitute Research Center for financial fraud (snaiFFRC) disclosed to kelong headed by the 2005 top ten most fraudulent financial companies of the listed companies means is more amazing the financial fraud of smart. Self, circulating trading, trading of yin and Yang, the packing channels, always accou
5、nting errors, large bath, mergers and acquisitions, restructuring, concealed stocks, the report cash traps, this is a top ten listing companies financial fraud trick. One, the concept of financial fraud and way Financial fraud is the subject of false financial information processing in accounting an
6、d reporting process, to obtain undue economic interests, used deceptive means to intentionally lied about the importance and financial facts of violations of laws and substantive violations. Financial fraud has four characteristics: unlawful, intentional sexuality, danger, and concealment. Specific
7、means of financial fraud can be said to be endless, but the core is intact. Income fraud including fictitious earnings and revenue across periods； cost of fraud including cross-phase meter cost less and adjustment costs as well as costs of capital； corrupt cash fraud, should be the project assets, s
8、uch as fraud, less provision for impairment； liabilities are generally less-total liabilities of fraud. Financial fraud means basically has the following several aspects: 1. the use of improper accounting policies and accounting fraud. Management typically use intertemporal amortization class accoun
9、ts for many share, share more, less or less cost to adjust profit. (1) the selection of inappropriate borrowing costs accounting method. In practice, many listed company through misuse of borrowing costs accounting, in build a project completed and not the final. (2) improper selection of equity inv
10、estment accounting methods. Principles of enterprise accounting regulations: investment enterprises of joint control or significant influence, should adopt equity method； instead, it uses the cost method.But many companies use, when the investee company profit, should not use the equity method inves
11、tment using the equity method of accounting； when the investee company loss, the equity method to the cost method . (3) improper selection of merging policy. (4) the improper selection of depreciation method. Extended depreciation, by accelerating method is changed into the straight line method, in
12、practice it is often seen. (5) the improper selection of income, cost confirmation method. Advance or delay the confirmation of income or expense is also listed companies generally adopt cheating. (6) the improper selection of the impairment provision method. 2. use of enterprise internal control sy
13、stem defects and the weak link of fraud. As the cashier personnel use enterprise blank check, financial dedicated seal, legal person seal does not separate keeping malpractice, privately issued checks, misappropriation of public funds. Cozy with his duties incompatible staff collude with a fraud. 3.
14、related party transaction fraud. The related party transaction fraud, refers to the management using the related party transaction to hide losses, fictitious profits, and not in the statements and notes in accordance with the provisions as appropriate, full disclosure, the resulting information will
15、 have on the users of financial statements misleading a fraud method. Typically, Chinese listed companies using the purchase and sale of related fraud, fraud, entrusted with the operation of funds embezzlement, fraud and other four kinds of cost sharing related transactions by way of fictitious prof
16、it. 4. the assets of fraud. Asset restructuring, mergers and acquisitions, debt restructuring, asset replacement form, occurring between the related parties. Assets reorganization of corrupt corrupt corrupt major mergers and acquisitions and debt restructuring in two ways. 5. cover up fraud transact
17、ion or fact. Hide transaction or fact of fraud is through the use of accounting statements to hide transactions of listed companies or the truth, or has not been fully disclosed in the notes to the report deals truth an fraud methods. Second, the causes of listed companies financial malpractice List
18、ed companies financial malpractice caused several of the following reasons: 1. financial return far greater than the cost of fraud. To meet listing standards at some companies desperate to find ways to make financial fraud, and fraud, to meet the policy requirements. In addition, because the share p
19、rice is times the income and earnings per share, and high stock market price/earnings ratio of deformity in China, so the main purpose of listed companys financial fraud is false profits. False profits of $ 1, the circulation market value of listed companies will increase 10 times times times. Relat
20、ive to the fraud fraud income, cost is too low, from a certain extent, it is too low a fraud cost contributed some fraud. 2. corporate governance structure is not perfect. Corporate governance structure is in fact about between owners, the Board of Directors and senior executive officers rights assi
21、gned and the arrangement of a system of checks and balances, the reality in China, led directly to the equity structure of listed companies malformations include the general meeting of shareholders, Board of Directors, Board of supervisors, which distort the relationship between corporate governance
22、 structure of checks and balances, which has provided an opportunity for financial fraud in listed companies. This is mainly manifested in the following aspects: (1) the ownership structure is not reasonable. As of the second half of 2006, the Shanghai and Shenzhen stock market, shares of over 50 li
23、sted companies only 185, largest shareholder holding ratio of no more than 25 and only 219, 6070 listed companies have invaded and occupied by large shareholders of listed companys funds. In the case of high concentration of ownership, possibilities of treatment failure of listed companies increased
24、, listed companies, the greater possibility of financial fraud. (2) the independence of the Board is not strong, internal control is a serious problem. China listed company Director served as Senior Manager of the phenomenon is more prevalent, Director serves as the Senior Manager (internal control)
25、 more than 50 per cent of the sample company 32, more than 30 per cent of a sample of 65 companies. In this case, the operation of the Board is usually Insider or shareholder control, rather than based on the collective interest. This has led to the phenomenon of frequent corporate financial fraud.
26、(3) the Supervisory Board weakening the oversight function, financial report difficulty in discharging its oversight functions. Based on analysis of listed company financial reporting fraud, Board of supervisors system in suppression of financial fraud in China did not play a role of Directors and m
27、anagers of monitoring. Listed companies are required by law to set up a supervisory board, Board of supervisors actually are in a very awkward position, lower right or upper right of vulnerable rights of supervision or stronger right. 3. accounting staff lack of professional ethics. Finance and acco
28、unting personnel who are directly involved in financial fraud, from the macro perspective, is mainly long term and not enough on accounting ethics education, lack of accounting professional standards； micro-perspective, strong sense of company accountants law, in order to meet company leaders of unh
29、ealthy psychological, thus violating the ethics of being practical and realistic, objective and fair. In addition, individuals driven by economic interests, has also led to some accountants deliberately forged, altered, hiding and destroyed the accounting information, taking advantage of his positio
30、n of financial fraud. 4. accounting and audit system is not sound. In recent years, although China is making a lot of accounting and auditing legislation, but from the practical point of view are not perfect and sound. Poor operability of some provisions, resulting in accounting fraud an opportunity
31、. New accounting law legal responsibility chapter referred to serious, criminal, significant losses are not quantified, has no specific explanation. 2006 implementation of new accounting standards, provided more accounting options for management, which provides management with more profit opportunit
32、ies. In addition, lack of punishment measures, social supervision is not strong, quality performance evaluation of accounting does not work, no ability to detect fraud, also can lead to occurrence of listed companies financial malpractice. Third, the governance of listed companiesfinancial fraud cou
33、ntermeasures 1. coordinating the relationship between benefits and costs of financial fraud. We should increase the penalties for financial fraud, financial fraud costs more than it gains, so you can basically stop financial fraud. At the same time, in charge of financial malpractice should bear unl
34、imited joint and several financial responsibility, which can to a large extent, inhibit their impulses of illegal counterfeiting. For those who dare to report the accounting officer shall provide ample rewards, so that its behavior is greater than the loss of income to report financial fraud. In this way, financial malpractice liability and they will take the initiative to give up the idea of financial fraud. 2. perfect the corporate governance structure. Improve the internal governance structure of the
