An Analysis Of Legal System For Preventing Distortion In Fiscal Information

Fiscal information is the most crucial economic information, and also the foundation for enterprises to improve self-management and administration, for investors to make investment decisions, as well as for governments to grasp the overall national economic status. However, in the real world, distortion in fiscal information widely exists and poses significant problems to the whole mercantile world. Distortion in fiscal information is a great menace, the possible consequences of which may shackle enterprises' interior management and administration, weaken efficacy of governments' macro-control, traumatize investment environment, and damage interests of investors and creditors, and so on. Therefore, it is of great significance to research on distortion in fiscal information. Distortion in fiscal information has always been an important research topic within the domain of accountancy, but since the causes resulting in the distortion are very complicated, it is hard to achieve a desirable effect if it is studied from only the perspective of accountancy. Recently, scholars have started researches on distortion in fiscal information from the perspective of Law, aiming to prevent it through constituting corresponding laws and regulations. This paper, against the basic principles of Accountancy, studies distortion in fiscal information from the perspective of Law, and aims to construct, with references of successful foreign legal systems and on the basis of China's historical background and current legal situations, a defense system guarding against distortion in fiscal information.Starting with definitions of two important concepts, namely fiscal information and distortion in fiscal information, the paper analyzes causes and threats of the distortion in fiscal information; the paper moves to summarize the useful experiences for preventing distortion in fiscal information, after introducing the corresponding legal systems of some developed countries, and suggests to amend related laws and regulations, identify liabilities, establish committee for interior audit, and ameliorate audit system for registered accountants and so on; furthermore, the paper points out to establish a legal system for preventing distortion in fiscal information should be urgently implemented and it is of great necessity to find out insufficiency in China's existing laws and regulations for preventing distortion in fiscal information, after analyzing several recent incidents of distortion in fiscal information and officially-published investigation data; the paper finally concludes with several suggestions on improving China's legal system for preventing distortion in fiscal information: firstly, in order to improve China's legal system for accounting supervision, the related laws such as existing Account Law, Audit Law, Corporation Law and Registered Account Law should be amended; secondly, interiorly, the enterprises' administrative structures and interior control system should be improved, and, exteriorly, supervision of the Chinese Government over enterprises, CPA (Certified Public Accountant) industry, and supervision of registered accountants over enterprises should be strengthened; lastly, civil liability system should be established so as to clarify its legal obligation.