Study On Forensic Accounting Of Financial Fraud Governance In Listed Companies

In recent years, the financial fraud cases of listed company have been increasingwith the development of economic and stock market in Chines. There are manybehaviors like control the profits of corporation and fictitious transactions in somecorporations, especially in listed companies. It would provide many opportunities forcorporation financial fraud because of parts of the CPA firms cannot implement therules perfectly when they auditing the listed companies. In regard to these problems,forensic accounting is becoming more and more important for the governance of listedcompanies financial fraud. In this article, based on theoretical analysis, the writer alsointroduced the relevant provisions of the law. The purpose of this article is find the weakpoints of forensic accounting in management corporation financial fraud and putforward some proposals for these weak points through analysis the necessity andfeasibility for use the forensic accounting in management corporation financial fraud.The innovation of this article is raised that the forensic accounting plays a role in theprevention and domination for the behaviors of financial fraud in listed companies. Thewriter holds the opinion that corporations would decrease the financial fraud to avoidthe lawsuit fearing the forensic accounting staffs`investigation.This paper is divided into five sections except introduction and conclusion:Part Ⅰ: The overview of financial fraud and forensic accounting. First, introducethe basic theories and the concept of the financial fraud and forensic accounting will beclarified; and then the present situation, elements, law and regulations and the legalresponsibility of listed companies’ financial fraud will be introduced; finally introducethe forensic accounting’s history and evolution, concept and compare the forensicaccounting with judicial accounting.Part Ⅱ: Introduce the necessity and feasibility to use forensic accounting in thefinancial fraud in listed corporations’ management.Part Ⅲ: The functions of forensic accounting in governance the financial fraud inlisted companies. The paper will discuss the functions from three aspects: preventiveaction, control function, investigation and litigation support.Part Ⅳ: The problems of forensic accounting in manage the listed companies’financial fraud. This article discussed these problems from four aspects: basic researchof theories, law and regulations, the quality of forensic accounting staff and the application in practical.Part Ⅴ: Based on the discussion of part three and part four, this pare put forwardsome proposals for the problems have been talked in part four.