The Financial Fraud Of The Listed Company Has The Auditing Strategy Of The Certified Public Accountant

Financial statements comprehensively reveal a company’s financial condition, business performance and cash flow during a given period. Information in the financial reporting is useful for the shareholders to assess whether each task is completed, and can help to evaluate the managers’ business performance. What’s more, by reading financial statements, managers can find out and solve problems without delay to enhance the economic benefits. At the same time, financial statements is useful for the existing and potential investors, lenders and other creditors in making decisions. It helps users to understand the return that the entity has produced on its economic resources. It is an indicator how efficiently and effectively managers have used the resources of the entity. It is also helpful in predicting future returns.However, a lot of listed companies provide false financial information by financial fraud to mislead users of the financial statements’ for their own benefits. As the economy develops continuously in 21 century, many companies are known due to financial fraud. During 2014, China Securities Regulatory Commission(CSRC) investigated 43 listed companies for their financial fraud, and punished 16 listed companies. From these investigations, we can see that illegal information disclosure has presented new features. Some listed companies do not disclose the assurance and associated parties. Major shareholders and actual controllers transfer funds illegally. Some companies make up major transactions to decorate their economic performance. All those cases have affected the capital market severely and damaged other people’s benefits. So the CSRC should take actions resolutely to blow those illegal actions.It is very important for auditors to recognize the fraud methods when auditing financial statements to reduce the audit risk. This thesis starts from the different business cycles of a company’s business activities, and reveals different financial fraud methods that listed companies would take and the signs that their fraud activities display. Then, it makes some suggestions on fraud auditing from CPAs’ aspect which can contribute to the detection of fraud and fraud control to some extent.