Where does the fictitious profit of listed companies start?

Fictitious profits of listed companies range from forging contracts, falsely issuing VAT invoices and falsely increasing sales revenue. A large number of legally unrelated but actually related companies traded, inflating sales revenue; Adjust the aging of accounts receivable in disguise and make less provision for bad debts; Adjust accounting policies at will and implement profitable operation; Prepare operating profit by drawing assets impairment reserve; Assets were not recorded in time, and amortization expenses were undercharged.

1. What is the purpose of the company's inflated profits?

The purpose of the company's inflated profits will give investors false information about the company's good performance, raise the company's share price and bring profits to the company. You must pay taxes. In order to increase profits, enterprises often use methods such as less depreciation or no depreciation, or temporarily not recording the incurred current expenses, or less interest expenses that should be borne in the current period, or less provision for asset impairment. The inspection method should be selected according to the actual situation of each enterprise. In order to inflate sales and profits, enterprises make up creditor's rights, or don't transfer accounts receivable for a long time, which is actually a dormant account for bad debts, or underestimate the provision for bad debts, inflated assets, inflated management expenses and inflated profits. In addition, enterprises will also use other accounts receivable subjects to withhold income and artificially raise profits.

Second, the inflated profits of the company have great tax risks.

A listed company was punished by the CSRC for inflating its income and profits. However, its inflated behavior led to the successful refund of the application for overpayment of taxes, which triggered a heated discussion in the industry. Professionals said that although the tax refund received by enterprises is legal and compliant, they still face the risk of being punished for fabricating false tax basis, and may also have a negative impact on the tax credit of enterprises, with serious consequences. A listed company that inflated its income and profits was punished by the Securities and Futures Commission, and successfully obtained a corporate income tax rebate of 2.5 million yuan after application. Many people in the industry have had a heated discussion about this incident. Professionals said that the tax refund received by enterprises is legal and compliant, but it does not rule out the possibility of being punished for fabricating false tax basis.

In the capital market where profit is king, listed companies hope to win the favor of investors through "beautiful" financial report data. In order to meet the needs of market value management and refinancing, some listed companies take risks and whitewash their financial statements by inflating their income and profits to achieve this goal. Professionals say that such behavior will leave many hidden dangers for listed companies and may even constitute a crime.