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Analysis of the costs and benefits of the Public Company Accounting profit manipulation

Author: ZhouMin From: www.yourpaper.net Posted: 2007-11-19 17:47:19 Read:
Abstract: This paper analyzes the Public Company Accounting profit manipulation of the main ingredients and benefits constitute a quantitative analysis of the costs and benefits of the main. Listed companies in the current situation there must be accounting profit manipulation conclusion drawn on this basis. Finally, the cost-benefit analysis as the basis of how to further control the profits of listed companies to manipulate recommendations.
Keywords: listed companies; manipulation of accounting profits; cost / benefit analysis

Public Company Accounting profit manipulation is a hot issue in recent years, accounting research, but research is focused in the following areas: Controlling Accounting Profits conditions for the existence of motivation; inspection of the Public Company Accounting profit manipulation; Public Company Accounting profit manipulation test; Public Company Accounting profit manipulation. In fact, the Public Company Accounting profit manipulation is an economic rational behavior, it must satisfy the principle of cost-effectiveness, ie accounting profit manipulation by individuals or groups derive income from which must be greater than the costs borne. Therefore, if we want to limit the listed company's accounting profit manipulation, we must reduce the income of the Public Company Accounting profit manipulation, or increase the cost of listed companies and the manipulation of accounting profits personal costs outweigh the benefits. This requires us to understand the content and bearers of the benefits and costs of the Public Company Accounting profit manipulation. This article will make some analysis in this regard.
Public Company Accounting profit manipulation main analysis
Listing profit manipulation, must first have presided over the main and auxiliary behavior. From the current situation, the Public Company Accounting profit manipulation following the subject:
1 administration. The authorities said herein, refers to the chief leadership of the board of directors of listed companies and general manager of a listed company. The management authorities control the company's accounting policies (Tang Songhua, 2000), the accounting profits of listed companies to manipulate the first presided over by the authorities.
2 of the Public Company Accounting staff. Accounting profit manipulation is bound to be completed by the accounting staff and how to manipulate accounting profit to cover up the manipulation, evade censorship, accounting personnel more than the authorities functional skills, the Public Company Accounting personnel is a necessary condition for the accounting profit manipulation .
Local government officials. Accounting profit manipulation process, local government plays the role of supporters in many listed companies, and even some accounting profit manipulation planning by local government officials, Liu Feng (2001) had confirmed that such examples, so we them as a body.
4 listed companies. Listed company itself is a legal person, the accounting profit manipulation process has its own independent benefits and costs, and the benefits and costs of a direct impact on the proportion of profit to shareholders, and therefore will affect the feasibility of manipulation by the authorities accounting profit. From this point to consider. As an independent body.
Each listed company's accounting profit manipulation main revenue
The first thing to note is that this article said revenue, not just economic benefits (salary, incentive compensation), including on-the-job consumption, promotion posts to improve these people's welfare. Manipulate the main accounting profit in a business contract in which the position is different, so the the main accounting profit manipulation income also different.
Accounting officer from the Public Company Accounting profit manipulation in the proceeds. Accounting staff from the proceeds of the Public Company Accounting profit manipulation mainly two aspects, one is the improvement of income (such as increased bonuses, benefits) another keep may be about to lose jobs (accounting personnel to assist authorities manipulation of accounting profits, is likely to lose their jobs, despite China's new "Accounting Law" stressed the legitimate rights and interests of the protection of accounting personnel). To quantify these two aspects of the revenue can be difficult, but we can reasonably assume that this income is not more than 2 times the accounting staff salaries. According to the latest survey, the average salary level of Mainland China 39,313 yuan / year, so we can be estimated accordingly accounting personnel of the Public Company Accounting profit manipulation revenue of at least $ 4-8 million.
Company's management of the Public Company Accounting profit manipulation income. Managing Board of the Public Company Accounting profit manipulation income mainly in three areas: on-the-job consumption, high salaries and promotion opportunities. When the poor performance of listed companies, the salaries of the Company's management may reduce the loss of promotion opportunities and may even be removed from office. In order to keep their jobs, maintain on-the-job consumption, earn high salaries and even career opportunities Company's management may take accounting profit manipulation means. Most of the listed companies in China are state-controlled environment, "the absence of owners", "internal control" quite serious (Zhaofeng Jun 1999). In addition, the Company's management salaries far more than the general staff, has recently been drawn from the more than 1,000 listed companies in Shanghai and Shenzhen 100 Furniture representative enterprises, according to the survey in 2001, the average annual salary of the chairman, president 131400 Yuan, general manager of the average annual salary of 103,600 yuan. As for the benefits promoted to management authorities, will be more job
Consumption and higher salaries. Difficult to track of these benefits, but it is clear that this income will be more than 100,000 yuan.
Listed companies accounting profit manipulation income. Listed companies in the accounting profit manipulation income mainly two aspects: (1) the performance of the company whitewash, the company has been public offering of stock, eligible for placement, as well as the availability of low-cost debt financing (such as bank loans, etc.), Chen Xiaoyue et al (2000) and Lu Wenbin (2000) confirmed these phenomena. Which allows companies to lower the cost of capital. (2) the performance of the company whitewash optimistic about the market, leading to higher stock prices. Chinese listed companies in 1999 the average total capital 1,697,301,000 yuan, it is estimated that in 2002 the number of capital will be greater than this value. According to the July 2002 announcement of the China Securities Regulatory Commission, China's domestic listed companies in 1187, the total market value of 4.579437 trillion yuan, float market capitalization of 1.506382 trillion yuan, 553,869,000,000 shares of the total share capital of 3,857,990,000 yuan, the total market value of the average of each listed company, circulation market value 1,269,060,000 yuan. Now we assume that the flow of a listed company a market value of 1.2 billion yuan, 1.6 billion yuan of total capital. Market due to the company's accounting profit manipulation generally optimistic about the company's shares rose 10% (a daily limit), an increase of 1.2 billion yuan float market capitalization; addition, the cost of funding due to the announcement of the "blue chip" credit decreased by 1%, the company's capital costs will fall by 16 million the absolute number of the element. The two accounting, the listed company's total revenue will reach 136 million yuan, which is an extremely amazing number.
Local government officials in the Public Company Accounting profit manipulation income. Local governments in the Public Company Accounting profit manipulation direct benefits, but government officials have direct benefits. Public Company Accounting profit manipulation listed, eligible for allotment, to promote local employment, investment and consumption. All of these will be the results of government officials ruling, its promotion, award-winning great help to provide an opportunity for local government officials to seek more "rent". It is difficult to accurately estimate these benefits, but this data will never be a small number.
Public Company Accounting profit manipulation main cost distribution
We discuss the Public Company Accounting profit manipulation cost from two aspects, one is due to the manipulation of accounting profits misleading and lead to loss of the securities market misallocations costs, the cost referred to as direct costs, another cost due to the accounting profit manipulation was found to be penalized for the loss of cost, which we call indirect costs.
(A) of the Public Company Accounting profit manipulation direct costs and commitments listed companies earnings information to be manipulated, there are varying degrees of distortion, will certainly bring losses to the information users to make decisions based on this distortion information. Broadly speaking, any use of the information of this distortion will bear some costs, but the amount of point of view, bear the direct costs are mainly two types of people, one is the basis of such false information, the stock of securities investment investors, Hon-Man Chan (1999) had truly depicts Joan source accounting fraud losses to investors. The other is based on this information to the creditors of the listed company debt financing, debt surge in risk.
The indirect costs of the indirect costs (b) of listed companies accounting profit manipulation and distribution of listed companies accounting profit manipulation bearers can be divided into two types, namely the listing of the company (legal person) and the person directly responsible (natural persons). Listed companies accounting profit manipulation was found, it is likely to be punished, the punishment is the listed company itself and presided over the main parties to assist the accounting profit manipulation. The indirect costs of the Public Company Accounting profit manipulation depends primarily on two factors: the possibility of accounting manipulation was found and published, as well as the punishment.
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