China's Listed Companies' Financial Fraud Case Studies

In recent years, the scandal of "Financial Fraud" has been reportedfrequently. It concerns a bunch of huge even famous listed companies whoreleased fraudulent financial reports to cheat on their investors all around theworld. As a result, the majority of investors lost their trust on thesecompanies' financial reports and their faith in investment. In Chinese capitalmarket, this phenomenon exists also, especially in resent years.The financial fraud activity of listed company in Chinese capital markethas its own specialties and reasons. This article is an empirical study about themain methods of financial fraud as well how to discover the listed company'sfraudulent financial report. The related problems about the activity in thelisted company include the institutional factors, the information disclosureand corporate governance.This paper shows that the Chinese capital market needs more perfectsystem to prevent these financial frauds. At the end of this article, someadvices are provided to help the investors how to use the accountinginformation.