Research On The Recognition Of Financial Report Frauds In Chinese Listed Companies

Since the opening of Chinese stock market, we observe a frequent break out of the financial report frauds, which brings great effects to the Capital Market. Not only influence the health of Chinese listed companies, destroy the mechanism of Securities Market, but also bring the unprecedented credit to the whole Capital Market and Accounting. How to detect the financial statement distortions easily and effectively has raised significant attention from regulators, investors and auditors, etc.Nowadays, academic circles in China conduct the research on the recognition of financial report frauds, for example standard research,real diagnosis research. But there is not any mature ideal about uniting the two ways. Whatever experience distinguishes method or logistic regression model, they exist limitation independently. Experience distinguishes method is very subjective without the data strut, and requests jobholders having extremely rich experience. Logistic regression model lacks the flexibility. So we combine experience distinguishes method and logistic regression model, build a recognition system of financial report frauds, which can increase the accuracy.PartⅠelaborate basic theory about financial report frauds, expound financial report frauds definition firstly, and make it compared with other concept; secondly analyze the real origin (reason, chance and means) by "the three element theory"; thirdly introduce various recognition methods which are applied in our country currently.PartⅡanalyze present situation about Financial Report Frauds In Chinese Listed Companies, choose 66 China's listed companies which are punished by China Securities Regulatory Commission in 2003-2006, based on punishment which is announced on《China Securities Regulatory Commission announcement》and some information which is announced on Shanghai Securities Newspaper and China Securities Newspaper. Taking them as samples, The author analyze financial report frauds year and industry distribution,fraud type,fraud means.PartⅢdesign a recognition system of financial report frauds. It has two steps: The first step is integrating experience recognition method by three big key elements of financial report fraud creation; analyzing the portent of listed company financial report fraud in our country deeply and building a fraud risk factor reviewing card. With 48 listed company financial report fraud characters in the card, information users can judge the enterprise financial status directly; The second step is building a recognition model, we can lead the formula suspicion companies' financial norm, and calculate the P value. if P＞=0.5, We determine it have financial report frauds; ifP＜0.5, we determine it is normalPartⅣsummarize the research above, analyze the limitation of the article and prospects the further study of the fraudulent financial subject.Innovation and characteristic:1,We integrate experience recognition method by three big key elements of financial report fraud creation, analyze the portent of listed company financial report fraud in our country deeply and build a fraud risk factor reviewing card. With 48 listed company financial report fraud Characters in the card, information users can recognize suspicion companies.2,We select samples and financial norm and build a recognition model which is effective through Element Logic Returns Method.3,We combine experience distinguishes method and logistic regression model, builds a recognition system of financial report frauds, which can increase the accuracy.