| Research BackgroundThe capital market in China has made great progress, with the economy developing rapidly and the capital pouring into the market continually. There are, however, crises that can't be ignored while the capital market is prosperous, especially the credit crisis caused by affairs about the fraudulent financial statements. A series of cases of fraud in the stock market, such as the case of"qiongmingyuan","hongguang ", and "yingguangxia", not only do harm to the economic interests of the share-holders and creditors, but also make the immature capital market in a disadvantageous situation since the false account information leads to the escalation of speculative behavior and abnormal fluctuation in the market, moreover, makes influence on the smooth development of the stock market. Therefore, the cost of fraud will be disastrous.As is well known, independent audit is the foundation of the development of the stock market, as well as a system that guarantees the quality of account information provided by listed companies. Confronted with the prevalence of fraud in the capital market, CPAs, as economic police, can't deal with it successfully, inversely, are haunted by it. The audit for fraud has caused a serious care in both professional and theoretic circle of audit, and it becomes a worldwide- complicated problem. It is also an urgent and important problem in China. During recent years, AICPA, ACFE and NCFFR have been contributing to the research on fraud and fraud beat. The international forum on the prevention and audit for fraud were held in Beijing in July 2001, and the underlined base for humanities research of the ministry of education regarded the "Research of methods and criteria of the audit for fraud in capital market" as an important project in 2001.Research Logic and MethodsBased on the above background, the author has a try to touch on such an ancient but brand-new topic——fraud and audit for it. Fraud includes misappropriation of assets and fraudulent financial reporting. Since the latter is more common, more expensive and more difficult, the author stresses it in this paper.The research of this MS thesis aims at how to detect the fraudulent financial reporting for CPAs. Chapter 1 states that it's CPA's responsibility to detect fraud in a financial statement audit. On the basis of it, the following three chapters focus on an important type of fraud—— fraudulent financial reporting and the way to detect it. In Chapter 2, the author analyzes the reasons and the methods of fraudulent financial reporting. Then, it is explored how to detect and identify the fraudulent financial reporting in a financial statement audit in Chapter 3, which is the core of this paper. In the end, Chapter 4 analyzes the case of Liming Company.There are some characteristics in the research methods of this MS thesis. Firstly, the paper not only discusses the theoretic problems, but also the practical operation. Secondly, some new ideas are put forward based on the comparison and absorption. Thirdly, the author manages to make the research deep and in detail. Finally, many figures and graphs are applied in this paper.Structure of This MS Thesis The whole thesis is divided into four chapters. Chapter 1: CPAs' audit responsibility for fraud. It begins with the definition and the classification of fraud. This chapter points out that fraud is a conduct with which one intentionally violates laws and regulations forhis own interests. SAS No.82 issued by AICPA divides fraud into two types: misappropriation of assets and fraudulent financial reporting. Then the author briefly reviews the history of auditing object in the world, drawing a conclusion that CPAs should shoulder the responsibility of discovering the fraud in a financial statement audit. After that, the author distinguishes the detection of the fraud in a financial audit from the examination of fraud. Finally this chapter discusses the requests of China's independent audit standard that CPAs should detect the fr... |
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