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Analysis and Countermeasures of information disclosure of listed companies in China related party transactions

Author: GuanXiaoYun From: www.yourpaper.net Posted: 2009-05-25 02:46:06 Read:
[Abstract] related party transactions can reduce costs; improve operational efficiency and profitability, and enhance the market competitiveness of enterprises; reduce the overall tax charge reasonable tax avoidance. However, since the majority of listed companies in China is from state-owned enterprise restructuring, widespread inextricably related party relationships and related party transactions between listed companies and the holding company and its affiliated companies, trading open, just and fair sexually questionable. Currently, listed companies related party transactions whitewash financial statements, earnings manipulation, infringe upon the legitimate rights and interests of small and medium investors, has become a phenomenon of concern in the securities market.
[Key words] listed companies related parties related party transactions disclosed

Transactions with related parties in the matter of transfer of resources or obligations between related parties, regardless of whether a price is charged. Related party transactions in recent years been more and more attention in the stock market, related party transactions has become a key factor in long-term health of affecting securities markets. Non-fair related party transactions not only can not be an objective assessment of the performance of listed companies, but also become the tool of related party "hollowing out" of listed companies.
, The overall condition of the listed companies in China related party transactions disclosure
Generally speaking, the number of occurrences and the transaction amount of related party transactions of listed companies in China are very impressive. Analysis of related party transactions of listed companies in China, listed companies has a strong dependence on related parties, Viability. Related party transactions active related parties with unequal exchange infringes upon the interests of listed companies has created opportunities, but also a large number of related party transactions makes the performance of listed companies to become more fair, objective, creating a false prosperity to the stock market to outside investors investment decision-making and higher risk. From another point of view, the related party transactions regulatory task is daunting.
Second, the problems of the related party transactions disclosure of listed companies in China and the reasons
Related party transactions disclosure of listed companies in China Problems
Related party transactions are common in China's listed companies, the majority concentrated in the listed company to its parent company or with the parent's other subsidiaries. In recent years, the related party transactions of listed companies in China to the development of the related purchase and sale of equity transfer and replacement of assets, development transactions from tangible assets to intangible assets transactions, many forms, trend intensified. At present, the occurrence of non-fair related party transactions has become a major feature of our related party transactions.
(1) Related parties and related party relationship disclosure
Many listed companies listed in the related party transactions with related parties related parties listed, you can see the range of related parties lack of uniform standards, the use of a lot of confusion. Mainly as follows: (1) some listed companies think only of its controlling shareholders have a significant impact is related parties control relationship exists subsidiary non-disclosure. (2) some listed companies, subsidiaries, associates and jointly controlled entities as related parties, but not reveal their holding and shareholders have a significant impact. (3) "related party transactions Standards guidelines, the case of a control relationship exists with related parties, related parties, such as for the enterprise, regardless of whether the related party transactions, are required to disclose relevant information. The number of listed companies No transactions with related parties, undeclared related party, but elsewhere in the financial statements can be seen that the existence of related party relationships. The many listed companies will be confused with related parties and affiliated companies. Disclosure of major investors, key management personnel and close family members, and other related obviously missing or blank.
(2) inadequate disclosure of related party transactions
Information disclosure of listed companies related party transactions do not fully correspond to the information disclosed does not make a full disclosure, but take evasive tactics when it comes to related party transactions at the heart of often avoided, or understatement, users of the financial statements is very hard to understand, or even misleading statement users. Some companies deliberate non-disclosure of some of the major events, increasing the investment risk of the investor. Elements of the disclosure of related party transactions should include at least three aspects: (1) transaction amount or the appropriate proportions; (2) the unsettled amount or proportion of the project; (3) pricing policies and principles. In the annual report of listed companies in the notes, at the same time reveals very few of these three aspects. In particular, to what pricing policy and pricing specific principles disclosed weakest, many companies will "forget" the disclosure of these elements, people can not help but suspect that the fairness of transactions.
Listed companies in China related party transactions disclosure does not regulate the reason
In a market economy, the related party transactions is an extremely complex activity. Either in the form of goods and services transactions, exchange or lease of assets, lending of funds or managed operations. Therefore, the information disclosure status investors will have consequences. Some listed companies related party transactions to disguise its operating results deceive shareholders. Therefore, the information disclosure of related parties and related party transactions became of great concern to shareholders of listed companies. And the problems for a variety of reasons, and is analyzed as follows:
(1) A listed company with violations motivation
The company's goal is to seek maximum benefits, as long as the information disclosed on purpose to meet the maximum benefits, companies are likely to act rashly, deliberately incomplete disclosure or fuzzy disclosure of related party relationships and transactions. The listed companies irregularities motivation: (1) listed companies to shape the image of the "well-run" to attract investors to buy their stock. some listed companies profit forecast inaccurate close to the actual number of shareholders expectations, they may also carry out a number of related party transactions, the level of profitability of the reporting period approached or reached the level of profitability of the forecast. (3) of listed companies for the purpose of protecting trade secrets. The reason why some companies related party transactions is to joint related enterprises to combat competitors. (4) of listed companies in order to evade taxes. The majority of listed companies in China's income tax rate of 15%, 33% in the general corporate tax rate there is a big difference. Therefore, the number of listed companies from the perspective of tax avoidance, the related party transactions as much as possible the transfer of profits to the listed companies.
(2) The Commission supervision and information disclosure on related matters are not stringent enough
China's securities market has introduced a public offering of shares Company Information Disclosure Rules (Trial) "Securities Law" and other laws and regulations, from the normative role of accounting information disclosure behavior. Chapter III of the 2006 implementation of the "Securities Act" the Securities and Exchange Continuous Dissemination of Information relevant provisions. The supervision and management of the SFC in this regard is not yet in place, is clearly contrary to the guidelines and regulations on information disclosure in order to manipulate profits of listed companies is not strong and timely punishment, some damage to investors' interests and national interests of related parties The transaction does not take effective measures to fight against and prevention. Some listed companies, a region, a number of the region's economy, taxation, employment, in order to take care of local interests, the Commission may sometimes take a more lenient policy, which is actually contrary to the securities market justice and fairness.
(3) Public Company Accounting professional quality varies greatly
China now has more than 12 million accounting personnel, knowledge structure, the educational structure and the level of business is uneven, the overall level is low. Formal university education is not more than 10%, the vast majority of accounting personnel after a short training or technical secondary school graduates, the level and ability of its business are greatly reduced. A lot of accounting information on related party transactions disclosed in the specification is not familiar with, a clear understanding of certain concepts and relations. There are serious quality problems due to the restrictions on the level of accounting personnel, the disclosure of information. In addition, the certified public accountant in the accounting information disclosure of listed companies did not fulfill its due responsibilities is also one of the reasons.
Third, the specification related party transactions and its information disclosure of listed companies proposed
1. Improve the relevant norms
Related party transactions Standards in China and its development of guidelines to be further improved because the guidelines on the disclosure of the transaction is too principled and superficial, very important related party transactions the degree of influence on the overall financial position and operating results of the enterprise and not requires the disclosure. The core issues - the disclosure requirements of the pricing policy is very rough, that listed companies report a wide variety of pricing methods. For the difference with the normal market price and its reasons, guidelines do not clearly defined. Lead to the disclosure of the pricing not make much sense for investors, investors can not derive information facilitates decision making.
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