Study On The Problem Of Financial Reporting Fraud Of Listing Corporation In China

There were frequent outbreaks of fraud cases both at home and abroad which havegreatly damaged the confidence of investors and d the fairness of the securities market at thesame time since21century. The financial report fraud phenomenon affected investors withhuge losses if financial fraud behavior could not be dealt with efficiently. It will continue toimpact on the securities market of our country. Therefore, the management of financialreporting fraud has become the hot issue of public attention. Financial reporting fraud makesthe information of listed companies distorted which lead the fact that the way of investors andthe related benefit person evaluated through the market mechanism to restrict theinvestment of listed companies will be failed. There is no doubt that it will cause companiesmay have the courage to engage in high-risk, high-yield activities. Financial report fraudcause the financial management data information asymmetry that will inevitably deceiveinvestors and obtain excess profits.The deterioration of the financial report fraud phenomenon also attracted the socialattention for the audit responsibility. The audit theory and practice are of great controversyon whether CPA have the responsibility on the financial statement fraud. According to thecurrent audit professional standards, Certified public accountants should have directsignificant responsibility of fraud in financial report.It also pointed out that neglectingprofessional standards is the main reason of audit failure. In addition, how to audit the fraudphenomenon also became one of the audit thinking problem.Based on the background of the financial reporting fraud phenomenon in recent years,this paper combined with the fraud case of North China pharmaceutical company in2011andthe issue of current listed company financial fraud cases in our country, introducing theclassical theory of listed company fraud and unique perspective of auditors to find out thenormal,summing up the common means of fraud in order to put forward some relatedfeasible solutions and enable investors to have a correct understanding of the investmentvalue of listed companies in order to make right investment decision in the market.