What are the common means of financial fraud of listed companies?

In case of financial fraud, investors can claim compensation from audit institutions through legal channels, and the qualifications of relevant auditors may also be cancelled and a certain fine may be imposed. All financial fraud is related to company executives. As long as we cut off the channels for executives to shirk their responsibilities, we can eliminate most of the motives of listed companies to falsify.

Means of financial fraud of listed companies

1. Use related transactions between enterprises to improve business performance and whitewash financial reports.

Generally speaking, most listed companies in China belong to group enterprises, and most of them are in a complex and diversified structure, no matter from the company structure, organizational form, business scope or various operational links.

The data of the consolidated accounting statements disclosed to the outside world cover the economic activities of the parent company, subsidiaries, various joint ventures, associated enterprises and various enterprises that are controlled, jointly controlled and have great influence.

All affiliated enterprises are independent legal persons with independent accounting. However, affiliated enterprises often cooperate with each other within the whole group, even as commercial customers, which theoretically provides a platform for listed companies to adjust consolidated data through internal transactions.

2. Pursue a flashy short-term profit-seeking behavior through "bubble restructuring" or surprise asset transfer.

This kind of non-recurring income obtained through debt restructuring and asset transfer is not always there. Because the main business has not actually increased, the performance of these enterprises often drops sharply after a year or two of substantial improvement, and investors fail to invest because they only pay attention to the growth of the apparent income of enterprises.

China stock market is dominated by zf. In the initial issuance stage of listed companies, the CSRC requires the company to make profits for three consecutive years. The main way to raise funds from the public after listing is to issue shares, which leads many companies to carry out financial packaging for the benefit.

The origin of CPA audit is that company managers may have the motivation to manipulate profits and falsely report their performance based on self-interest. Shareholders, as property owners, in order to protect their own interests, entrust independent auditors to examine, identify and report the performance of economic responsibilities by managers.

However, at present, the CPA system has not played its due role, and financial fraud continues to appear, mainly because there are some problems in the CPA system itself.