Study On Financial Reporting Fraud Based On Corporate Governance

The financial reporting fraud is a more than 300 years, and has been make the everyone's tough problem. The financial fraud cases in the take place continuously, Making financial fraud of management face rigorous challenge.In this paper, I collected the data from 106 A shares companies (1999-2007.Sep) in China which had been forfeited by SEC because of fraud, studied the current situation firstly, and then analyzed the pressure, opportunity, and excuse factors by theoretical and positive analysis from an angle of corporate governance, finally raised relative solutions.This paper consists of five chapters. In chapter 1, we introduce the research background, meanings, scope, method and content, and also define the concept of fraudulent financial reporting, and review relative literatures. In chapter 2, we make some statistic analysis on the general situation, fraudulent financial reporting types, profit effect, fraud method and the penalty degree about the 106 shares companies. In chapter 3,I use "Triangle Theory of Fraud" and empirical analysis, to discover that the pressure is mainly form the following four aspects: acquire the qualification as listed companies, improve the issuing price, acquire the qualification of allotment of stock shares, manipulate stock price, avoid being delisted and the information disclosure of misconducts; the opportunity is mainly from the weak interior corporate governance (for example the unbalance of share structure, inefficiency of the board meeting, the independent directors being not independent, the insider control, internal supervision meeting exists as the name only etc), the failed corporate governance outside mechanism (for example the agencies lack of independence, weak government supervision, lack of penalty, limited freedom of media, incomplete external market constraint and credit assessment mechanism); the excuse is one way from the organizational culture, but more important is affected by informal institution. In chapter 4, through the above analysis, this paper puts forward "4 Un" solutions for controlling fraud, that is to reduce external pressure, to make it "Unnecessary"; to decrease the opportunity, to make it "Unable"; to decrease the excuse, to make it "Unwilling"; to increase punishment force, to make it "Unpowered". The fifth chapter summarizes the whole dissertation.This paper is innovative in the following three areas: One is that I collected the data from 106 A shares companies (1999-2007.Sep) in China which had been forfeited by SEC because of fraud,and do the thorough covariance analysis and researches towards the influence to the accountancy the information quantity.The second is that I use "Triangle Theory of Fraud" and empirical analysis, to discover that the pressure factors,opportunity factors and excuse factors; The third is that this paper puts forward "4 Un" solutions for controlling fraud; The fourth is the paper involves the analysis of fraudulence affected by media free right and informal institution.