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A Study Of The Problems On Disclosure Of The Related Parties Transactions Of The Group Enterprises

Posted on:2003-10-15Degree:MasterType:Thesis
Country:ChinaCandidate:S Z ZhengFull Text:PDF
GTID:2156360092491333Subject:Accounting
Abstract/Summary:PDF Full Text Request
Under the free economic system, enterprises have developed rapidly. On their way of seeking growth, they have expanded continuously and have increased the efficiency. In order to ensure the supply of raw material, to expand the market and to diversify business risks, enterprises would take various integration strategies, either vertical, horizontal or multiple, and finally has establish a so called "Group Enterprises". Group Enterprises, by means of cross shareholding relation, not only can achieve the benefits of economy scale on market sales, production management and financial arrangements; they also have substantial effect and contribution to the economic development. However, Group Enterprises can also take advantages of their cross shareholding relation, making various abnormal transactions to evade tax, to manipulate benefits between companies, to window-dress financial reports in order to gain advantages of their own or for the others. Therefore, I would like to research on whether the disclosure on the related parties transactions is true and reliable? Whether it can protect the interests of the public dealing on shares, the minority shareholders and the creditors.In order to ensure equality on tax and to prevent the related parties of the Group Enterprises from making use of the share transfer to manipulate the transfer of interest, Finally, I would like to suggest that the governing authorities should make up a complete mechanism so that the transactions are fully disclosed and publicized. The majority shareholders of the Group Enterprises should establish a correct management concept, and to dissert the mentality of "one man company". The formulation of strategy of the company has to consider the benefits of the minority shareholders, to follow the laws and to consider the social liabilities in order to establish a good enterprise image. I also suggest that the investing public should elect those people with legal and finance knowledge to act as the supervisors of the companies.
Keywords/Search Tags:Related Party Disclosures, Non-Arm's Length Transactions, Full Cost Approach, Variable Cost Approach, Negotiated Pricing
PDF Full Text Request
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