Study On The Accounting Regulation Of IPO Companies In China

For a long time, the behaviors of accounting frauds have seriously damaged the interests of the majority of investors, and have affected their confidences in the stock and capital market. Meanwhile accounting fraud behaviors also hinder the efficient allocation of capital market resources, and prevent the orderly development of the capital market. Therefore the accounting fraud study has also become the subject of intense research in current academic and theoretical circles. However, these non-stop bubbling-up frauds constantly cause huge losses to investors and public, and the global economies are at greater risk "at the same time. For instance, the IPO companies’financial fraud cases of Yinchuan Guangxia Industrial Corporation in the main Board and the Yunnan Green-Land Biological Technology Company in small and medium enterprise (SME) board have caused their investors’interests losses.In 2013, known as the "the first stock of rice deep processing", the Wanfu Biotechnology (Hunan) Agricultural Development Company (hereinafter refer as Wanfu Biotechnology), was found huge financial fraud,false IPO packaging and fraudulent listing of the company as well, which became the first fraud stock listed on the growth enterprise market(GEM). Wanfu Biotechnology keeps sales growth for three consecutive years and creates a huge inflated profit before Listing. But how these corrupt behaviors escaped IPO qualification examinations successfully and become listed company on earth?During this process, what improper or failed conducts happen in the SFC, the sponsors, and accounting firms? What are problems of China’s IPO companies accounting supervision that need to be solved? These questions have led a deep think in this field. Through these cases we find that the lack of IPO company accounting supervision or not in place result in a distortion of accounting information, which lead to the astonished transitions of a large number of listed companies such as the rapid decline in financial performance, and eventually the uncover of IPO fraud facts.To enhance the quality of the listed companies in China and reduce fraud accountings, strict IPO companies accounting supervision should draw great attention to ensure the orderly, efficient and healthy development of China’s Securities Market.This article is intended to study China IPO companies accounting supervision. By analyzing fraud reasons of Wanfu Biotechnology, the author will put forward IPO accounting supervision optimization measures. These measures will consist of improving accounting standards system, strengthening the construction of the accounting regulations, advancing the supervision of government regulators, elevating CPA independence, and improving the audit services price management to avoid vicious competition. Meanwhile advice about increasing penalties on corporate fraud, illegal CPA and related enterprises and personnel, reasonable positioning the responsibilities of the regulatory authorities, optimizing corporate governance structures and so forthare also provided in this thesis, hoping to strengthen the China IPO accounting supervision.