Means of financial fraud of listed companies
1. Use related transactions between enterprises to improve business performance and whitewash financial statements.
Generally speaking, most listed companies in China belong to group enterprises. No matter from the aspects of company structure, organizational form, business scope and various business links, most of them are in a complex pluralistic structure.
The data of consolidated accounting statements disclosed to the society include the economic activities of parent companies, subsidiaries, various joint ventures, associated enterprises and various enterprises with control, joint control and significant influence.
Affiliates are independent legal persons, accounting independently, but they are often complementary in the whole group, even commercial trading relations, which theoretically provide a platform for listed companies to adjust consolidated data through internal transactions.
2. Pursue a flashy short-term profit-seeking behavior through "bubble restructuring" or sudden transfer of assets.
This kind of non-recurring income obtained through debt restructuring and asset transfer does not always exist. Because the actual growth of the main business is not large, after a year or two of substantial performance improvement, the performance of these enterprises tend to decline sharply. Investors invest because they only pay attention to the growth of apparent income of enterprises, but do not invest.
Extended data:
China's securities market is dominated by the government. In the initial issuance stage of listed companies, the CSRC requires the company to make profits for three consecutive years. The main way to raise funds from the public after listing is to issue shares, which leads many companies to carry out financial packaging for the benefit.
The origin of CPA audit is that company managers may have the motivation to manipulate profits and falsely report their performance based on self-interest. Shareholders, as property owners, in order to protect their own interests, entrust independent auditors to examine, identify and report the performance of economic responsibilities by managers.
However, at present, the CPA system has not played its due role, and financial fraud continues to appear, mainly because there are some problems in the CPA system itself.
People's Network —— Institutional Reasons for Financial Falsification of Listed Companies
Baidu encyclopedia-accounting fraud