Analysis On The Motivation Of Frand Of The Financial Statements Of Listed Company

The capital market in China has developed for20years. The stock issuance was highlyadministrated by the regulatory approval system initially, later intervened by the authorizingsystem, and until now approved through certification and registration. These changeswitnessed the growth and maturity of capital markets, and exposed many public companiesfinancial fraud scandals as well. It is closely related to the market system and environment ofstock issuance in China. Sponsor System in China came from the developed capital marketfor small companies in UK and Hong Kong, and was localized and applied to main marketand growth enterprise market (GEM). As the sponsor for the stock issuance, the SponsorSystem undertakes responsibilities of counseling, recommendation, and informationdisclosure supervision. However, heavily influenced and intervened by the Chinesegovernment, Sponsor System is gradually biased from its initial purpose. In order to meet theexamination from CSRC (China Securities Regulatory Commission), conspiracy of fina ncialfraud becomes the disadvantage of the industry.At the same time, the actual system vulnerability also affects that the sponsor cannot playinto full role. For example, the sponsors and underwriters for identity overlap, sponsor spower and responsibility cannot match each other. Besides, listed companies, localgovernments and investment institutions driven by interest,the securities market lack ofhonesty, they are all important influence factors that the intermediary institutions can not beconscientious to issue a true, accurate, comprehensive and timely experts. Facing variousproblems that lead to financial fraud of listed companies, firstly, we should register systemreform in time, reduce government intervention, improve the quality of info rmation disclosureof listed companies, making up for institutional defects. Secondly, introducing the shortingmechanism, strengthening the construction of market integrity and the rule of law. Finally,intermediaries can examine the listed company s information prudently, making independentprofessional judgment, is the expected results of market regulator and every marketparticipants, but also is the inevitable trend that maintain securities market develops healthilyand orderly.