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On the listed company disclosure of accounting information distortion causes and countermeasures

Author: YiLing AiMin TanXiaoPing From: www.yourpaper.net Posted: 2010-05-12 16:55:41 Read:
Paper Keywords: information disclosure of listed companies accounting drop-registered accountants across any system of securities regulation system
Abstract: the endless stream of false information of listed companies Phi oligonucleotide event, especially aroused enormous repercussions for the accounting profession and ponder. Point of view, the main source of accounting information distortion from the current status quo in our country is not yet in the accounting system and accounting standards, but rather the lack of an efficient support system. The article discusses the impact of the corporate governance structure, CPAs across any system with the securities regulatory regime support system of accounting information disclosure quality of child, and put forward several suggestions to improve the information disclosure of listed companies accounting plug system.
The securities market is an important place for the securities market in resource allocation effectiveness operation lies in the degree of perfection of the system of information disclosure of listed companies. In order to improve the quality of accounting information disclosed to guide the sound development of the securities market, the countries in the world are committed to the establishment of a comprehensive set of accounting information disclosure system. Of the relevant government departments has compiled and published dozens of laws, regulations and systems, such as the Company Law of the People's Republic of China corporate finance and accounting reports Ordinance "stock issuance and trading Provisional Regulations" (for the State Department) "Enterprise Accounting Standards" the Corporation accounting system "basic accounting work norms" (Ministry of Finance), "the financial statements of listed company disclosure rules" (SFC). Since the promulgation and implementation of the new accounting method "on July 1, 2000, the Ministry of Finance to increase the pace and intensity of the accounting reform, the introduction of the" enterprise accounting system "," non-monetary transactions "debt restructuring" Standards substantive changes. These major initiatives for the inhibition of earnings manipulation and accounting fraud great deterrent, and laid a solid institutional foundation to improve the quality of the information and the financial report of the Public Company Accounting transparency. However, the stock market irregularities and not as promulgated and implemented these systems reduced after Joan source, red, Dongfang Boiler, ST Zhengbaiwen exposed Guangxia ST dawn accounting fraud egregious cases . These acts to the accounting profession, a thought-provoking question: the new "enterprise accounting system" has basically adopted the international accounting standards, why the listing of the company's accounting fraud or despite repeated prohibitions? This paper attempts from the independence of the corporate governance structure, CPAs competition issues, the securities regulatory authorities, as well as cost-effective asymmetric support system to find the reason, and the problem from the point of view of accounting theory and practice of the quality of accounting information disclosure of listed companies to come up with strategies and recommendations.
A distortion of accounting information disclosure of listed companies Causes of
(A) internal factors: inadequate corporate governance structure
The disclosure of information is one of the decisive factors in the company's governance structure, its requirements, content and quality but also by the direct impact of the corporate governance structure. The separation of ownership and management in the modern enterprise system, will inevitably lead to the investors with the management of the listed companies there is serious information asymmetry. Of widespread "dominance" phenomenon, not only state-owned enterprise restructuring the company so is the number of new private enterprises listed similar problems. This shareholding structure is bound to cause serious information asymmetry between the size shareholder groups, the minority shareholders of large shareholders often take advantage of the information superiority to manipulate the company brazenly looting the interests of minority shareholders, and as vulnerable groups are often unable to timely and accurate information to understand the interests of impaired and unaware. General information by the management responsible for the preparation and provide management appointment is clearly dominated by the major shareholders will or influence. Management authorities, driven out of interest, often together and largest shareholder, and the use of their own hands a lot of private information and data, for a cosmetic and beautification of the statements, based on the need to constantly adjust the revenue and earnings, passing false information to the market. Common way: in the preparation of the financial accounting statements clever use of misuse of accounting policies, free to change the depreciation policy, less demand mentioning or more depreciations; flexibility to determine the reserve ratio, with more or less as needed to mention the various reserve ; overestimation or underestimation of inventory valuation, demand to determine the valuation standards; the hidden or in off-balance conceal profits. The "black-box" operation of related party transactions: fictional capital occupation fee; fictitious investment income; the fictitious asset leasing income; fictional cost burden is passed on and so on. This false accounting information, and will not only disrupt the real valuation performance, increase investment risk, and will lead to inefficient or ineffective configuration of the securities market resources. But so far, China's corporate governance structure has yet to ensure that the quality of accounting information real effective to make the institutional arrangements, the board of directors of listed companies on the accounting information authenticity and integrity of a weak sense of responsibility. Therefore, in order to prevent the disclosure of false accounting information listed companies, it is necessary to improve the corporate governance structure, dispersed ownership structure, the clear general meeting of shareholders of the Company, the Board of Directors, the Board of Supervisors, as well as independent directors of the responsibility and the right to make it duties are independent of each other, mutual checks and balances .
(B) External factors: the lack of competition and independence
Certified Public Accountant
If the corporate governance structure is the underlying causes of false accounting information of listed companies registered accountant appointment system is the most direct external causes leading to the accounting information to be false. As we all know, the company must be entrusted to a certified public accountant to audit and issue an audit report of its preparation of financial statements, financial reporting and accounting information, Certified Public Accountant audit the accounting statements and audit reports reviewed and approved by the China Securities Regulatory Commission announced. In this process, if the certified public accountant under its listed companies hired pin down, do not speak of professional ethics, and listed companies, "a singing the same tune, will inevitably lead to the unreal, not legal audit report came out, to deceive the majority of investors. Necessary to regulate the behavior of the integrity of the certified public accountant alone to strengthen ethics training for certified public accountants, or are not enough to stop their behavior by public opinion. Independence is a social audit of the soul, and the competition is to maintain the vitality of the source of the CPA profession, the lack of independence and competitiveness, social audit attestation function will be worthless, may make the listed company's accounting fraud more deceptive. According to the Commission may require listed companies to hire an accounting firm must be approved by the general shareholders' meeting, however, in the case of internal control widespread, general meeting and no rights of control and decision-making power often lies in the hands of senior managers . The appointment of certified public accountants in fact determined by the senior managers. This distorts the appointment system, will inevitably lead to the the CPA and listed companies are too close and loss of independence. This not only reduces the Certified Public Accountant professional acumen, but also dilute the sense of responsibility of the CPA to the public, Therefore, it is necessary to strengthen the independence of certified public accountants, the introduction of competition mechanism, strengthen risk awareness of the accounting firm.
(C) The regulatory regime of the accounting information to be further improved
China's corporate governance structure is unsound, the CPA Audit poor quality has become an indisputable fact. However, the securities regulatory authorities - the China Securities Regulatory Commission, the regulatory level and the intensity is not optimistic. Over the years, the China Securities Regulatory Commission in the stock market took on an all-powerful role, responsible for both qualification prior to the listing of the company and the supervision and management of listed companies, information disclosure of listed companies with false records, misleading statements or material omissions the situation in accordance with the law to investigate and deal with. Faced with increasingly large groups of listed companies, the supervision of the securities regulatory authorities obviously inadequate. The securities market fraud scandal after another, in addition to the listed company and a certified public accountant for its own reasons, the SFC also some reasons. Review of the China Securities Regulatory Commission is often an afterthought supervision, punishment is not enough, and can not play the role of filtering false information. Currently, the Commission has not established comprehensive restraint mechanisms, regulatory personnel do not have a high sense of national responsibility and good market awareness, he can not concern the accounting information is true, and will mainly focus on how to better fulfill the central government's macro-policy the need to get up.
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