Information Disclosure Of Listed Companies In China Related Party Relationships And Transactions

More than 1300 companies have been listed in Shenzhen andShanghai Stock Exchanges by August 2004. The transactions betweenrelated companies have been a focus problem in the market. Since mostlisted companies are transformed from the old state-owned enterprises,related transactions generally exist between the listed companies and itscontrolled companies. It has been a fact that the listed companies evadetax and adjust the achievements by making use of those relatedtransactions. The relationship between the traded companies and theirtrading information have great influence on the decision of investors,however, such related transactions are controlled by the internals of thecompanies, the investors, creditors, supervisors, etc. can hardly get thoseinformation. Thus such transactions usually become a tool for somebodyto achieve their special purpose, while the interests of other people areharmed. So it is absolutely necessary to make coercive measures topublish the relationships of the related parties and their transactions. Inorder to analyze the conceptions, classifications, features, and situationsof the related transactions, to understand the purpose, rules, ways, andrequires the publishing of the relationships and their trading information,the author have made a thorough research on those items. Obviously it isof great significance for the accounting theories and applications toresearch the information publishing of the related parties relationshipsand their transactions. According to this theme, the paper consists of four chapters. The first chapter is the preface of the paper, introduced the aim andsignificance of the article, summed up completely the relevant documentsresearched on the information publishing of the related parties and theirtransactions. The author also briefly introduced some conception, logicsand structures of the paper. In the second chapter, the author mainly explained why it isnecessary to make coercive measures to publish the relationships of therelated parties and their transactions. Analyzed the features of ordinaryrelated transitions, and pointed out its four major features: (1) it is aninevitable result of economic development, and has deep theory origin ofeconomics. (2) the related parties are equal in legal, but not in economics.(3) the objects in related transactions are usually various in forms. (4) therelated transactions are in fact controlled by the internal group, its mainpurpose is to seek a maximum profit for the special group. In the third chapter, the author first introduced the purpose of theinformation publishing system of listed companies, and the conditions toimplement the system, the current legal system, the form of informationpublishing, etc. then analyzed the purpose, rules of the related partiesrelationships and their trading information publishing, the ways ofpublishing and the requirement about the content. The author pointed outthat the information publishing of the relationships between listedcompanies and its related parties, and their transactions should mainlyaimed at middle and small stock holders, potential investors, creditors andother information users. It usually obeys not only the rules of ample, intime, and cost-benefit, but also emphasizes the application of theimportance, distinction, relevant and exception, etc. in order tocommunicate information effectively, proper ways should be used. Theauthor emphasized that the related information publishing should bemade independently and completely in the report notes. It is convenient tomake special auditing on the relationships and their transactions, and easyfor the stock exchange and tax authority to supervise and control. As tothe publishing substance requirement, the author pointed out that in ourcountry some publishing rules should be improved after compared thesimilarities and differences between China and the U.S.A. England andFrench. In the fourth chapter, the author commented and analyzed the currentsituation of the information publishing on the related parties and theirtransactions, p...