Fraudulent Financial Reporting's Prevention And Supervision In Listed Companies

After the Enron Case, the fraudulent financial reporting becomes the focus of the world capital market. The fraudulent financial reporting frequently occurred, which obstructs the order of our stock market, and makes the investors lose confident and activity. It is no doubt that there is nothing new in the fraud cases of financial reporting in public companies of our nation. Now, under the impact of financial crisis, the various trades and industries are facing unprecedented difficulties. How to effectively prevent and supervise fraudulent financial reporting, and to protect the interests of investors, and to maintain the healthy development of securities market becomes the shared concern of the economic circles and even the whole society.This paper provides an empirical study of fraudulent financial reporting in China through an analysis by Chinese listed companies based on the sample of 74 cases which punished by China Securities Regulatory Commission (CSRC) over the six-year period from 2002-2207. The paper uses normative and descriptive statistical analysis of a combination of research methods, from the angles of connotation, and harm of the fraud in financial reporting. I elaborate the industry classification, the type of frauds, the method of frauds and the age of frauds which had happened in our nation and analyze the reasons of the existence of the fraud in financial reporting of our nation. Further more, I propose the concrete measures which are directed to toward the fraud in financial reporting.Through the study of this article, this enriched the definition of the meaning of the fraudulent financial reporting and the causes of the theory. The paper finds that the occurrence of the fraudulent financial reporting features in the concurrency, hidden and continuous characteristics, for the choice of regulatory strategy to prevent and provide an effective reference. In order to protect the interests of investors and to maintain the healthy development of securities market becomes the shared concern of the economic circles and even the whole society.