Research On Financial Fraud Characteristics And Audit Countermeasures Of Listed Companies

As the important participants of the capital market, the listed companies play an important role in promoting healthy development of market economic and capital market. However, in order to play such a role, the listed companies must offer true and reliable information to the investors, creditors and other stakeholders in the capital market. The realistic condition is that in China’s capital market, in order to beautify the performance index, the listed companies frequently offer fraud financial information to the capital market. On the one hand, this phenomenon resulted in reducing authenticity of financial information; one the other hand, it affects the investors and other stakeholders to make correct and reasonable economic determinations which further disturbs development of the capital market.Under this condition, in order to guarantee that the listed companies offer true financial information, the investors and other stakeholders make correct and reasonable economic determinations, and promote the healthy development of the capital market, it’s necessary for us to analyze, conclude and summarize the financial fraud means and fields often used by the listed companies, to find out law in them, to provide the investors and other stakeholders clear with one clear understanding about the financial fraud means and fields often used by the listed companies, meanwhile, to make it convenient for the certificated public accountant to audit financial frauds of the listed companies.Based on above-mentioned reasons, this essay collects data of 77 listed companies which happened financial frauds in 5 years from 2010 to 2014 in China’s capital market, and conducts statistical research on the data. As shown by corresponding findings, the fields of China’s listed companies’financial frauds mainly involve in income, fees, assets, related transactions and information disclosure. In these fields, many financial fraud methods are used by the listed companies. For these financial fraud fields and methods, the certificated public accountant should adopt proper methods to audit financial frauds of the listed companies. The basic auditing methods adopted by the certificated public accountants include analytic review method, reading method, tax analysis method, analysis of transaction essence method and analysis of asset quality; special methods include Benford’s Law, brainstorming method and analysis of common factor method. As for the financial fraud methods that have serious effects on capital market due to inflating assets and profits and are used by the listed companies frequently, this essay also introduces fraud auditing methods for inflating assets and profits.Through analyzing, concluding and summarizing financial field and methods of the listed companies, this essay puts forward targeted financial fraud auditing countermeasures that are available for the certified public accountants to take reference. At the same time, as for above-mentioned contents, this essay also puts forward some measures to stop financial frauds of the listed companies, purify the environment in the capital market, and promote development of capital market and economic, which include strengthening governance of the listed companies, enhancing profession ethics of the listed companies and the certified public accountants, and reinforcing prevention force for financial frauds of the listed companies.