The Research On The Accounting Fraud In Chinese Listed

With the China's capital market development in the new era,it is imperative for the market to have a more perfect management mechanism if it wants to maintain its long-term and steady developmental trend.However,during the critical period of China's economic transition,the frequency of the accounting fraud cases of Listed Companies in China has been significantly higher in recent years than before,and there are no lack of serious and heinous cases,such as XI'AN DIMOND,Yin Guangxia,YUNNAN GREENLAND,and Wanfu Biotechnology,which all are well-known for accounting cheating in China.The exposure of these accounting frauds led to a sharp fall in the stock price of those companies,which not only let the vast majority of investors suffer huge economic losses,but also made those companies stagnate and even face the risk of delisting.The accounting fraud of those listed companies has seriously hindered the healthy growth of China's securities market.It has gone beyond the economic field and gradually became the concern of all sectors of the society.If the effective countermeasures wouldn't be put forward as soon as possible,it will bring hidden danger to the healthy development of the stock market.Therefore,based on the relevant throries and literature,taking the Er-Kang pharmaceutical company,a listed company,as an example,by using the method of case study,this paper studies the causes of the accounting fraud of the listed companies in China.According to the outline of fundamental state about the case company and description of the means of its accounting fraud,the internal causes were found for accounting fraud in China,including unreasonable ownership structure,family ownership structure,lower executive price,the fat profits to the managers for the stock incentive,not enough supervision by the indepentdent director and not strong independenc,staff's unevenness in committee on internal auditing,restriction to salary from the board of directors e.On the other hand,the external CPA is distracted in audit cost by management,the audition is not independent,and the supervision is not performed in time and strongly enough;it is difficult for the Securities and Regulatory Commission and the auditors to obtain the evidence in the cross border fraud;the small fine and warning against the enterprise involved in the accounting cheating are not strong enough,all of the above accounts for the external causes of accounting fraud.In view of the above arguments,some suggestions are put forward to improve the structure of equity management and the salary system for management,to revise the independent director system and to enhance the strength of the legal punishment.