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On the Causes and Countermeasures of China's listed companies accounting information distortion

Author: RenRuiˇˇLinYanˇˇQuNa From: www.yourpaper.net Posted: 2009-04-03 04:00:35 Read:
Abstract: Accounting as an economic information system, economic development and the construction of Chiang Kai-shek plays an increasingly important role. Distortion of accounting information, it means that accounting information lost value? Smoked listed companies in China there are the limitations of the system of laws and regulations, internal supervision mechanism is not perfect, and thus the weakening of the social intermediary supervision, accounting personnel quality is not high and low professional and technical capacity led to the distortion of accounting information. To solve these problems, we should strengthen the accounting and the legal system, strengthen accounting supervision system and increase efforts to crack down on accounting fraud, and strengthen the training of accounting personnel, improve accounting professional ethics, accelerate the establishment of a partnership with unlimited CPA fraud costs, containment of the Public Company Accounting Information Distortion.
Keywords: listed companies; accounting information; accounting information distortion

Since China's securities market was formally established in 1990, listed companies in China there has been a serious distortion of accounting information, the Shanghai National Accounting Institute Professor Ma Yin Ming "First Financial Daily" interview, said: "I am not an alarmist, financial fraud as a nuisance on the capital market, has not been significantly curbed, on the contrary, continues to spread. "
The so-called Public Company Accounting information distortion, listed companies accounting based on untrue or reflect the financial position and operating results of the false, does not meet the actual situation. The performance data is not real, does not really matter, fabricated false false false accounts table, virtual surplus real loss the virtual loss SUYIN, issuing false audit reports.
Adverse selection problem, because the company's stock listed on the issue would entail a high cost issue, underwriting fees, intermediaries costs, resulting in many excellent operating results, cash-rich companies are unwilling to listing or no listing on the securities market, eager listed may be those operating performance is not very good, the lack of funding companies. These companies in order to be able to meet the conditions for listing in the capital markets to raise the funds needed, it is possible packaging of its profits false picture of the financial position and operating results, in order to attract the attention of investors. This adverse selection result, capital flows, poor operation of the company. After these companies in the market, in the face of the pressure of the securities market, in order to keep valuable resources "shell", even in order to later on in the stock market to raise more money, do not rule out that they may continue to play accounting information to the market, lead to distortion of accounting information.

Distortion of accounting information Cause Analysis

1. Legal and regulatory system limitations
Although China issued the "Accounting Law", the "Company Law", "two" and a series of financial and accounting regulations and related systems, however, these regulations is far from perfect, the more general provisions of the law, poor operability. Some important laws and regulations did not work out the implementation details. Audit responsibilities of the phenomenon, such as providing false financial reports of listed companies and the authorities should bear the liability of the existing relevant laws and regulations, including the "Criminal Law", the "Company Law", "Securities Act" "Accounting Law" stipulates that the company itself should not be punished, the senior management directly responsible and other directly responsible person should be given penalties, the amount of the penalty is, but there are differences in the provisions made. So that according to which regulations specific to a company or a person be punished, in the end became a problem.
2. Listed companies property rights conflict of interest
Under the modern enterprise system, the separation of corporate ownership and management, the formation of the agency relationship between investors and operators, the basic idea is to make the performance of enterprises and production operators linked to personal income, in order to achieve the maximum mobilization of operators initiative. Investors seeking to maximize shareholder wealth, security and profitability of the invested capital, focusing on long-term development of enterprises, operators pay more attention to the economic benefits, such conflicts of interest is the fundamental cause of the distortion of accounting information of listed companies . Because of the good or bad of the economic efficiency of enterprises operating results, revenues are closely linked, and the economic benefits will inevitably manifested through the data. Accounting data as "beautiful", the more we can prove that the performance of the operators, their income is also considerable, and therefore inevitably arise false accounting data about the subjective will of the operators.
3. Enterprise whitewash accounting information to achieve the purpose of the listing
Some enterprises in the process of restructuring of listed companies, in the case failed to meet the qualifications of listed issuers, first listing eligibility for a cosmetic, followed eligible for allotment for a cosmetic companies listed on the most direct motive is to finance. New conditions of allotment, require the company to the fiscal year in the last 3 years weighted average net assets yield not less than 6%, despite the new policy after the introduction of listed companies are "Paul 6%" condition disappears, but the the allotment policy-making philosophy has not changed single financial indicators that the return on net assets to meet the requirements as the main basis of the allotment, so the motivation of profit manipulation still exists. Finally, in order to avoid delisting whitewash, the China Securities Regulatory Commission in 2001: a listed company if the last three consecutive losses by the SFC decided to suspend the listing of its shares, the stock name is preceded by "PT" is not eliminated within the time limit loss position, termination of the listing of its shares of listed companies to exit the stock market. Therefore, China's securities market the unique "burned, the second year of losses", "two years no loss, a loss amazing, one year apart or two years of intermittent loss of" manipulation of accounting profit information practices.
4. Accounting personnel quality is not high and the weakening of the social intermediary supervision
Accounting personnel accounting information this "product" "producer" of their basic quality of a direct impact on the quality of accounting information. Some financial officers, in the case of finance and accounting regulations related systems frequently modified to keep up with the requirements of the development of the times, can not understand the new regulations, the essence of the new system; not pay enough attention to business-to-business accountants to improve the quality of education in accounting successor weak, leading to a decline in the quality of accounting information.
Certified Public Accountant, known as the "economic police" of the market economy, but the in our transformation economic environment? Smoked the independence of the CPA is difficult to play. In fact, each city audit report are the results of listed companies and accounting firm bargaining, loss of independence of the Institute of Certified Public Accountants forced to gain and risk of cracks survival. Therefore, abstain from conduct, did not fulfill audit responsibilities, the major issues identified improper disclosure phenomenon, "junk" on the market with the wind blowing, seriously damaged the interests of investors and the market economy order. Second, the governance of listed companies accounting information distortion measures

1. Strengthen the accounting and the legal system
Establish sound accounting laws and regulations. The maximum extent possible to achieve convergence with International Financial Reporting Standards, and the timely revision of the published specific accounting standards and accounting system, pay attention to the rules and regulations of the localization and popularity, to make active community participation, to participate in the accounting regulations system has been developed, revised and discussed efforts truly become all parties recognized accounting regulations, the regulations are binding on the parties; efforts to eliminate "blind spots" in the regulatory system so that the responsibilities, rights, obligations, penalties Rules combine to reduce institutional, technical accounting information distortion. Managers, accountants, etc. have to strengthen the legal system, improve the relevant laws.
2. Market requirements to improve enterprise management system, strengthen accounting supervision system and increase efforts to crack down on accounting fraud
Corporate system as the mainstay of the modern enterprise system is the direction of the reform of China's state-owned enterprises, China is a socialist country, the structure of property rights to emphasize the following two aspects: First, the country as a macro-control, the need to represent the interests of the community, so that corporate objectives coordinated and social objectives, the state not only as the owner of the state-owned enterprises owned enterprise property rights, but also as a social managers, have the power to supervise the enterprise accounting information. Enterprise workers not only associated with the corporate interest, and they have the professional skills is a kind of human capital, physical capital have to leave this human capital, shareholders will not be able to value-added enterprise workers should constitute the enterprise property right system part of it must be stressed the importance of supervision by the masses. To prevent operators away from the owner of the interest objectives, establishment of an independent oversight bodies operators within the enterprise, by the agency commissioned an independent audit agency to supervise the state of the business, to get the real information. The same time, the need to establish a scientific and reasonable internal financial accounting control system, a complete accounting information quality assurance system. Appointed by the owner of the accounting bodies and accounting functions of the Chief Financial Officer, the Chief Financial Officer of the owner is responsible for accounting personnel chief financial officer. The business run by the operators sole responsibility of the Chief Financial Officer and management, mutual coordination and supervision of the Chief Financial Officer of the owners and operators to achieve incentive compatibility. At the same time, we must establish a system of supervision of the state and society. State supervision is the supervision of the financial, auditing, tax authorities; social supervision accounting firm commissioned by the firm of certified public accountants to audit the enterprise accounting, government, finance, banking, auditing, taxation, corporate economic supervision organically combine to reconfirm the enterprise economy, in order to achieve the purpose of improving the quality of accounting information.
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