A Research On Detection Of Fraudulent Financial Reports Of Chinese Listed Company

This paper raises a new framework to detect the fraudulent financial reports of thelisted company, and then explores its implementation by a case study. It is showed tobe a good way to effectively solve the practical issue of how to detect the fraudulentfinancial reports of the listed company basing on the position of the individualinvestor.Firstly, overview of the literature, the paper analyses the motivation of financialreporting fraud, the identifying characteristics of financial reporting fraud, the identifyindicators of financial reporting fraud and the fraud-detecting models. Secondly,basing on the researching of the concepts of financial reporting fraud, the means offinancial reporting fraud and the correlation theory of the havard analysis frameworkas well as modern risk-oriented auditing theory, the paper raises a new framework todetect the fraudulent financial reports of the listed company, which makes it availableto support case study. Finally, case study of the sample of HUBEI SANXIA NEWBUILDING MATERIALS CO. LTD through the analytical framework comes to theconclusions that the corporation is suspected of financial reporting fraud.The innovation of the paper is to build a powerful framework to detect thefraudulent financial reports of the listed company, which combines the theoreticalexplanation power and the availability and provides a methodology to help to detectthe fraudulent financial reports of the listed company.