Study On Fraudulent Practice In Financial Statement Of Listed Company And Countermeasures

After decades of development, China capital market has made a sight progress. It is a wonder to establish such a stock market with the total value ranking on the seventh in the world and the second in Asia; even China is still an underdeveloped country.However, we must realize that it is a key period now for stoke market developing in China. In the last half of 2001,the indexes of China stock market continued to go down, which indicated that the investor lacked confidence in stock market and that China had not set up a normal system to predict the stock indexes properly. There are several reasons for this. One is that the market principal parts betray laws and rules, such as Yingguangxia Corporation, Lantian Corporation, China Science Creative Cause, Black Fund Story, etc. All these problems have pressed investors' confidence. It is, therefore, urgent to regulate the stock market and protect the benefit and interest of investors (especially those moderate and small investors).Among these irregular behaviors, there exist some things much the same, like overdrawing fund, legal persons exchanging stock in name of individual, intermediary institutions putting forward fabricated certifications, listed companies showing fabricated financial statements and market controlling, issuing stock by chief, exchanging stock irregularly, expanding fabricated information, etc.Nearly twenty accounting rules have been decreed so far since the first accounting rule was declared in 1997 in China. Furthermore, Corporation Law and Stock Law have been modified continually. However, all these efforts still cannot yet prohibit these fraudulent practices in financial statements thoroughly.The first chapter is introduction.In the second chapter, the dissertation narrates several conceptions relating to fraudulent practices in financial statements and expound the rules listed companies should adhere to when they expose their financial statements. At last, the chapter analyzes the fraudulent practices in financial statements in China.In the third charter, the dissertation analyzes the reasons of fraudulent practices in financial statements from the aspects of unbalanced equity stoke structure and unreasonable prediction systems. The dissertation takes great attentionto the classes of fraudulent practices in financial statements. Then the dissertation analyzes fraudulent practices in financial statements in China stock market through Hongguang Corporation.In the fourth chapter, the dissertation puts forward four methods to be on guard fraudulent practices in financial statements in China.The fifth chapter summarizes the whole dissertation.