Accounting fraud caused the integrity of our secur

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Accounting fraud caused the Credit Crisis in China's securities market

Abstract: Since the 20th century, early 90s, the establishment of the Shanghai Stock Exchange and Shenzhen Stock Exchange, China's stock market from scratch and has achieved rapid development. At the same time, the accounting information disclosure system, as the securities markets developed. However, in affirming the achievements we also have to clearly recognize that the status of accounting information disclosure can not be blindly optimistic, the stock market there are some companies using a variety of corrupt means to artificially lower the quality of accounting information and their lack of reliability of accounting information to decision usefulness to investors. Be sure to say that accounting fraud has become an obstacle to the development of the obstacles to market standard, if not promptly resolve this problem, not only will shake the young Chinese confidence in the securities holdings of investors, and even led to the credit crisis, and thus disrupt the order of social and economic development. Chinese papers League finishing.
First, the theoretical basis of accounting fraud
American Association of Certified Fraud Examiners, founder of Eberron strange (W. SteveAlbrecht) proposed corporate fraud triangle theory, to analyze fraud is a representative theory. He believes that corporate malpractice and requires three conditions; Pressure (Pressure), opportunity (Opportunity) and rationalization (Rationalization). Specific performance of these three conditions:
First, pressure. Pressure is the motivation of those corporate fraud, is directly driven by interest. In fact, any type of corporate fraud are derived from the pressure, but the specific form is different. The pressure of corporate fraud can be divided into two types: economic pressure, work pressure. Among them, the economic pressure is the management of an enterprise or individuals in order to achieve specific economic objectives or to cover up the fact that the economy generated some corrupt motive; work pressure, including threats of job loss, enhance blocked, the dissatisfaction of the leadership, it will urge the parties to deal with by means of fraud examination, or from the company's assets to compensate.
second chance. Those elements is the opportunity for corrupt corporate fraud without being discovered, or to escape punishment conditions. Opportunities for the existence of elements, making it possible to achieve a corrupt motive. It is mainly the formation of the six performance: lack of or ineffective internal controls, information asymmetry, accounting and auditing systems, and the lack of punitive measures can not evaluate the quality of work performance and the inability to detect fraud.
Third, rationalization. Rationalization is essentially a personal moral value judgments. People are always judged by their own intentions, and behavior to judge others by, for its part, the intent is always much better than the act, so as to find an excuse for the fraud is very easy. Corporate fraud are common reasons are: others are doing, I do not do that is a loss; I just temporarily borrow money, and will definitely return to; This is the company owes me; I will be more by other aspects of returns and so on.
Second, the theory of accounting fraud
(a) of the pressure. Pressure of any element is the direct driving force of fraud, accounting fraud is no exception. For the purposes of accounting fraud, which is facing economic pressure and work pressure has its special.
1. economic pressure on the capital market in China mainly for fund-raising pressure.
In many companies, many people, the issue of shares in essence is However, not all can any one company stock issuance and listing. According to securities regulations, stock issuance and listing of companies for three consecutive years must be profitable, but the overall decline in recent years, economic circumstances, can do very little profitable business for three consecutive years, so many companies to issue and listing stock, it means through a variety of accounting fraud in order to ensure profitability for three consecutive years. Such as Sichuan red material in the issuing and listing will be 103 million loss in 1996 profit of 54 million yuan to do. Download Network [link widoczny dla zalogowanych]
Thesis IPO companies in addition to exist A number of companies to raise funds from share issue and stock issue price determined the amount, in which the amount of stock issued by the impact of the company less able to tamper with the only issue price of the stock. In China, December 26, 1996 before the stock issue price is based on forecast earnings per share the year issued and the issue of price-earnings ratio calculated as price-earnings ratio is also determined by the securities authorities, so many companies to overestimate the profit forecast The actual number is far lower than the projections completed. December 26, 1996, China Securities Regulatory Commission to make adjustments on the stock issue price, according to the average three years before the issue of new shares and distribution of earnings per share calculation, therefore, in order to raise funds for the ideal, many companies have in the prior year's accounting statements make a fuss. September 10, 1997, China Securities Regulatory Commission to turn the issue price of new shares: the stock issue price = profit after tax × earnings per share, including after-tax profit per share = Profit after tax per share, a year before the release of × 70% + year forecast issued diluted share after-tax profit × 30%. In this issue price under the pricing model, new issues are again in the company financial statements and profit forecasts last year at the same time make a fuss about the report. Number of these profit-based pricing model, the company thought to alleviate the pressure brought 圈钱 bound to a variety of corrupt means the number of inflated profits, in order to raise the issue price of the reaches, the purpose of more money into the ring.
addition to IPO, the allotment or issuance of listed companies is very important in terms of re-financing tool. Especially in recent years, the implementation of tight monetary policy in China, listed companies require financing in the stock market and then the desire is more intense. However,[link widoczny dla zalogowanych], the China Securities Regulatory Commission on the placement of shares or the issuance of listed companies have strict requirements. For example, before 1999, according to relevant regulations, listed companies share placements, rights issue in his application before the 3-year annual return on equity of 10% or more, are energy, raw materials, infrastructure, companies can lower class, but not less than 6%. In order to meet the requirements to maintain the placement of shares may be eligible for the listed companies