Research On Chinese Financial Fraudulent Behavior Analysis And Control Model

Financial fraudulent behavior has been a social issue beyond accountant field. It does huge harm to the society, not only damaging the interests of investors, but also destroying the running mechanism of whole capital market along with the principle of "justice, equity and publicity". In Chinese and foreign press conference held on March 14th of 2005, Premier Wen Jiabao remarked: "The standardization of market and protection of investors' interests should be regarded as the focal problem to solve in China this year." Therefore, the research on cause of financial fraudulent behavior and measures of prevention and cure becomes the emphasis in current accountant field.Firstly, this paper starts with the essence of financial fraudulence through analyzing its definition, actuality and harmfulness; Secondly, on the basis of using foreign financial fraudulent theories for reference, induction is adopted to analyze the cause and common tricks of financial fraudulence in China; Finally, in view of the complexity of financial fraudulence, three models are put forward to keep away financial fraudulence, namely, interior control, independent audit and forensic accounting. Interior control is interior line of defense while independent audit and forensic accounting are exterior ones. However, the functions of them are different, forensic accounting has some advantages in exposing and preventing financial fraudulence. Fraudulent audit of forensic accounting offers a way to find and solve fraudulent problems. By studying the case of using forensic accounting to keep away financial fraudulence in foreign countries, this paper offers a few commonplace remarks by way of introduction so that others may come up with valuable opinions, in order to evoke the practical research on forensic accounting in accountant field and to provide a new model for preventing financial fraudulent behavior in China.Financial fraudulence has a distinct characteristic: the more flourishing economy is, the more complex and concealed its manifestation becomes. Therefore, the effect will be not obvious if preventing financial fraudulent behavior only from one certain side,for the prevention of financial fraudulent behavior is a systems engineering. "Converging attack inside and outside" ought to be done in order to set up an integrative control system. This is what the author expects to make great efforts to do in this paper.