Corporate Financial Reporting Of Cosmetic Means And Preventive Measures - For Example, With Jinzhou Port

Varnishing of company's financial reports has always been one of the problems perplexing investors in making rational investments in the stock markets. In recent years, a number of significant financial scandals both at home and abroad have aroused attention to whitewashing of the financial reports of listed companies. How to tell the truthfulness of the accounting statements? What is the driving force for adulteration of financial reports? What are the measures to prevent varnishing of financial reports? In respect of these questions, this paper takes Jinzhou Port as the research target. Through analysis on its business and financial situation, the interior structure is analyzed. Targeting the chronic disease of the stock market that there is varnishing of financial reports, the reasons for adulteration of financial reports are analyzed. Measures are discussed for prevention of adulteration of financial reports, for reference for effective control of adulteration and varnishing of financial reports of listed companies and for gradual regulation of China's capital market and currency market.This paper is composed of four parts:First part: background information. It is a brief introduction to the basic situation of Jinzhou Port, the incidents took place in late years, for example rejection by the Ministry of Finance for its intended share participation in Jitong; personnel changes for high-level management introduced arguments and pausing of stock exchanges; financial adulteration was punished by the Ministry of Finance and Jinzhou Port became the focal point of the media.Second part: case study. Based on analysis on the ratios of historical fixed assets and incomes from core business, turnover rate of fixed assets and variations of cash flow, the following conclusions are made: 1. the relationship between fixed assets and income from core business is not compatible with the pace of a normal port enterprise. 2. Both the rotation rates of totalassets and fixed assets are extremely slow as against other enterprises of the same sector. It is extremely difficult to verify how much has been invested in the port by Jinzhou Port. 3. The faster the total assets increase, the further net profit slip. And this is the opposite development direction as compared with Tianjin Port which has equivalent gross assets. Third part: analysis on the factors causing adulteration of financial reports. This part combines Jinzhou Port case to discuss: irrational structure of stock ownership of listed companies and the share-dominant position of non-circulating shares; non symmetrical information and non transparency; non appropriate external supervision and regulation and non perfect legal environment.Fourth part: measures to prevent whitewashing of financial reports of companies. This part discusses: optimization of property right and improvement of supervision and regulating capability of independent auditing; strengthening government supervision and regulation and monitoring of the media.