Research On Financial Irregularity Of Chinese Listed Company

The paper is trying to build a preliminary industry-based horizontal comparative analysis framework to detect financial irregularities with public data for the public companies of China from the perspective of the supervision practice. Following is the fundamental analytical procedure: calculating the financial irregularities utilities for the non-financial public companies using utility function based on comparable industry to decide the extent and status of financial irregularities of individual company by cut off irregularities utilities with respect to the characteristics of fraudulence confirmed and fraudulence suspected sample companies of China public companies. Although there are some drawback because of data and other reasons, the result indicates that the framework built as above has some capability to detect financial manipulation for the public companies of China.According the research of this paper, the following should be carefully taken into consideration in the detection system developing: (l)The accuracy of financial data should be assured; (2)Some special data should be included the future database; (3)Further optimization and trial run are needed; (4)Industry-specific financial indicator can be developed; (5)And ideally, the future detection system should be open enough to allow the changes and adjustment in practice and for the field practitioner in the supervision.