Identification Of The Accounting Fraud With Analytic Hierarchy Process

The outbreak of the financial crisis has made the financial field suffered severely and all the blame has come to the accounting field. This evokes the re-evaluation of the accounting standards worldwide and the suspicion of the authenticity of financial statements among investors. Through an analysis of 100 accounting malpractice cases of the listed companies in China, punished by China Securities Regulatory Commission(CSRC), it is concluded that the accounting fraud in China is serious and those companies being punished are among various fields with large amount of money and different ways of cheating. So an analysis and identification of the accounting fraud of the listed companies in our country is of vital importance.In the first part, this article expounded the research background, significance and reviewed those researches that have been done home and abroad in this field. Then, it reviewed the basic theories of accounting fraud, including the iceberg theory, triangle theory, GONE theory, risk factor theory. Thirdly, an elaborate analysis of such factors as the underlying driving force of the fraud, the character analysis of the stakeholder, methods of the fraud and the possible abnormal financial indexes was made. The fourth part is an brief introduction into the analytic hierarchy process. Lastly, using those financial indexes analysed in the third part as a criteria and employing analytic hierarchy process, this article attempted to make an risk quantification analysis of all the 230 listed companies in the field of mechanic, equipment and apparatus. Then, on the basis of the above factors, it analysed the scores of the punished cases and its distribution. And an comparative analysis of the different scores and distribution of those punished and unpunished cases helps us reach our final aim of the identification of accounting fraud.