Study On Management Fraud Auditing For Chinese Listed Companies

During recent few years, many huge management fraud cases, such as Ying huang xia company fraud case, American Shi-tong footwear Co.Ltd fraud case and American Enron Co.Ltd fraud case, have broken out. These fraud cases have generated a huge panic from the capital market and fierce dissatisfaction from the public. And also, this evil phenomenon will badly endanger the healthy development of the capital market. Take the Authur Anderson CPA Co.Ltd which was one of the biggest five international CPA Co.Ltd and Zhong tian qin CPA Co.Ltd as an example, many CPA Co.Ltd have been closed down due to auditing failure. Without any doubt, The CPA occupation field is facing serious credit and survival crisis. How to check out the management fraud efficiently is an eternal problem for economical countries, and also a lasting international difficulty. Generally speaking, the management fraud is always realized by fraudulent financial reporting. But the fraudulent financial reporting can be divided into the management fraud and the employee fraud. Relatively speaking, the management fraud is more advanced and has a much worse influence. As the management layer has a higher status and louder voice in a company, they can do many things overstep the inner-control system freely but below water. Additionally, they have many ways to do fraud things. So if the management fraud happens, it will be much more difficult to check it out or do further investigation jobs. Furthermore, to some extend, a facially good inner-control system will be a powerful tool to help the management conceal their fraudulent practices. But, the risk-oriented auditing mode exists prodigious localization at this moment; it meets obstacles, which are even impossible to overstep when talking about the management fraud. Based on reasons mentioned upon, the auditing theoretic group and the auditing practical group both are calling for building a management fraud oriented auditing mode. But before that, we should make three " Ws" clear: What are the motivations of the management fraud? What is the environment for the management fraud?...