The Research On Auditing Strategy About Listing Companies’Financial Fraud

Listed companies as a principal economic activity is an important participant in economic activities, compliance with the relevant national laws, regulations, engaged in economic activities, and provide true and reliable financial information, which is the premise of economic activity. Providing real financial information is the basic functions of accounting, however, look at the status of listed companies in China, we will find the listed companies in the prevalence of providing false financial information, has reached the goal of the cosmetic company’s financial data, which not only eroded the accounting information the basic functions, but also misleading to the majority of ordinary investors to make the wrong decisions.Therefore, in order to ensure the basic functions of accounting to provide truthful information, but also to the vast number of investors from misleading of false financial information, we have the necessary means of the areas covered by the Chinese listed companies’financial fraud and is often used for analysis, summarized and summary of financial fraud to the Chinese listed companies with the means to establish a "hologram", so that we have a clear understanding of listed companies engaged in corrupt means, and identify corporate fraud means a basic reference for the audit staff.It is based on the above reasons, the paper of2004to2009, statistical analysis because of the irregularities were handled by the SFC a total of211listed companies found that Chinese listed companies for financial fraud involving five aspects:income, expenses,assets, related party transactions and information disclosure, for each of the different aspects of the listed companies will adopt different means of fraud, Income class is commonly used means of fraud:the inflated income, increase their income through the production of false certificate; change the revenue recognition time is about to be allocated income in the accounting period, thus affecting different times of the profits; to change the nature of income, is about does not belong to operating income of income through the production of false documents, business oriented, although this does not change the total amount of revenues and profits, but the impact of the structure of revenues and profits. Corrupt means in the cost category are:reduction charges, both recognized as the cost of expenditures are not recognized by the operation, including:excluding less impairment allowances, provision for impairment when the asset is impaired, included in the current costs, the company does not count or less the period of reduced costs; cost of over-capitalization, the costs of the expenditure of capital, to reduce costs and increase profits; one-time profits to offset the costs, one-time income, excluding income used to offset the costs, although no effect on total profit, but to conceal the true expenses. Asset class fraud for China’s listed companies, mainly in fixed assets, inventory and cash. Including fixed assets and inventories often exist in obtaining inflated the case of fixed assets in the process of using different depreciation methods affect the value of fixed assets; inventory variety, quantity there are wrong in mind and the omission of the General Assembly; enterprise one of the most important cash current assets, often considered the most secure in the past, the most unlikely of assets fraud, but from the last few years have found that the listed company’s cash fraud is increasingly common, including the carrying amount of cash, cash flow and the use of the funds raised. Related party transactions listed companies in China main areas of fraud, including:fictitious transactions,"price difference" trading, delegated or entrusted with the operation and cost-sharing and other methods to achieve the transfer of benefits between the associated enterprises. Statistical analysis showed that China’s listed companies treat the disclosure of information there is not serious, serious situation, this is because the regulatory bodies for violations of the disclosure of listed companies in the information punishment enough, although the disclosure of information from the impact in terms of its consequences uncertainty, and information disclosure of listed companies irregularities affect the investment decisions of investors, may have investors are not severely affected, is also a corrupt conduct, including false statements and material omissions, and timely disclosure of three aspects.Specific analysis for each type of fraud means as a basis for a targeted audit strategy and, ultimately, how to purify the Chinese capital market, the establishment of the integrity of the market environment, from listed companies, regulators and investors Chinese listed companies’ financial fraud measures.