Cook the books listed companies in China Tips Reve

fraudulent accounting of listed companies in China can be narrated as wave above wave, endless. To operate profits from sales of forged documents and narrated transactions to the major shareholders from the use of asset, from the false to the cheap investment in nailed assets depreciation, the Western capital markets means almost all of the general cook the writings to be characteristics Unfortunately, the Chinese media report false accounts of maximum listed companies still remain in the surface class, quite few listed companies from the technical class to expose the characteristic means of fraud. As an ordinary investor, how to aggrandize the use of information at their elimination, some unscrupulous companies cook the writings see through the graph? In truth, catered they have simple accounting knowledge and investment experience, via the inquiry of the financial statements of listed companies, many false accounting usages can be seen through, or at fewest can cause investors careful. We examined the financial statements, which requires both the longitudinal comparison of the annual, the corporation also has similar curtate contrast, merely comparison we can find questions and loopholes. Now the network is developed, the yearly reports of listed companies over the years, quarterly reports are easy to ascertain, the distress is how to resolve the

one, the largest accounting fraud Source: will have a large number of In mandate to raise the profits of that year, listed companies with affiliates or affiliated companies for credit transactions (the so-called affiliate is the relationship with the listed company has equity companies, such as parent companies,Gucci Wallet UK, subsidiaries, etc.; affiliates refer Although there is no equity relationship However, very close business relationship). As the label suggests, since it is credit transaction, to not generate cash flow, it will only influence the balance sheet and income statement, and not will be reflected in the cash-flow statement. Therefore, when we see the company's balance sheet listed on a large number of is not manipulation in the use of credit trading profits?

credit transactions will not be very long life wheel, the general resumption of the purchase price of the wheel of industrial enterprises in an year, too long for bad debt accounts will be included in the ranks of corporate profits, Therefore, companies are ordinarily the afterward year will be to get rid of the credit transaction. The solution is simple - to affiliates or affiliated companies to return the merchandise to fill in a return file, the equivalent of the handle did not occur, the previous year's poise sheet and earnings statement should be re-amended, but that for investors have been too late. Say, a car company claims to be sold in 2004 by 1 million conveyances, 10 million greenbacks to acquire a profit (of course, balance sheet and earnings statement would signify that credit sales), which makes it shares all the access up; to the end of 2005, the automaker said the company suddenly in 2004 sales of 1 million cars have been returned, the formerly announced 10 million dollars in profits should be deleted, the stock certainly has plummeted,Gucci Shoes 2010, the investors absence of vigilance unavoidable losses. In the West, capable investors are more profuse, but this little trick trick the market; But in China, not only lack of experience of ordinary investors, institutional investors, securities analysts and the media are a absence of appropriate level, a similar pitfall also cook the books truly fool many people.

more serious irregularities are fictitious accounts receivable, false sales records do not exist, this is beyond the ordinary Then In the

receivables mainly refers to the purchase price, when additional receivables are additional current accounts can be trust management, which can be a short-term borrowing, you can likewise use some arrange of intangible assets remittances and so on. Let us stand on disloyal accounts of the company's point of outlook of the answer, Sales documents are found to fraud extra probable. Other receivables, in terms of fraud is relatively simple and relatively large dictatorial valuation is not cozy eluded arrest. With Guangxia and mythical sales records were found Zhengbaiwen a lesson, then the counterfeiters tend to be extra secure means of forgery; , conclusive testify is difficult to arrest. For service enterprises, since the sales are not products, of course, there can be no In the Chinese stock market,

alteration a viewpoint, many of the company's tall As early as 2001, listed companies in China conducted a massive clean-up arrears to the efforts, most arrears are the outcome of misappropriation of funds, major shareholders, and most of the Although the major shareholders of listed companies misappropriation of funds has long been regarded as China's stock market from the mortal disease, an inventory of continual injunctions at regulatory authorities, yet still no cure in sight. In the current model of corporate governance in China, the largest shareholder of corporate funds is simply to easy; this is not strictly false accounts, but it is certainly a violation.


II, and For a huge quantity of corporate accounts receivable, bad debt reserves by one percentage point change could cause thespian changes in net profit. For example, annual sales of Boeing traveler planes value billions of dollars are calculated, these aircraft are installments, at a time the change in bad debt reserves by one percentage point, Boeing's net income will appear on the millions of dollars change , a dramatic clash on stock prices.

1999 years ago, China's accounting system for the bad debt provision is very strict, most enterprises are very low bad debt reserve ratio, or even lower to 0.1%, well underneath international train. 1999 was a rotating point in China's accounting policies, significantly increased the proportion of bad debts, general manufacturing companies bad debt ratio is upon 3%. However, the State can not require all sectors of the bad debt ratio, leaving the space of neutral control is still very large. From the practice of Western companies, the use of bad debt, there are two means of false accounts - one is the multi-meter, one is fewer approximately. Less about bad debt is easy to comprehend, so you can amplify profits, enhance stock prices; more dollars bad debt are generally needy in the year of operation or replace the CEO of the year, the new CEO is often a proclivity to engage in the performance of the 1st year especially meager, a great many of money included in bad debt, anyway you can put the reprehend on former CEO pate; the first years of the bad debt reserve list, less almost the next few years can not even count the profit of course, greatly promoted The credits will be logged in the head of the new CEO. The pith of this approach with the bad results for the first year after many years of nice results, the image in the West as China has no Certainly, but a large number; but Chinese investors are still very acute to this issue, did not realize the seriousness of the problem, the Commission single is not enough supervision.

theory, the listed company's bad debt ratio should change according to aging, the longer the aging of receivables, the greater the possibility Repudiation experience, the proportion of bad debts should be higher; some time has been lost too long to remunerate creditors may and should be written off,Cheap Gucci Trainers, admitted losses. Has certainly not pay for the receivables, such as the other bankruptcy, should be written off as soon as feasible. Unfortunately, there is still some listed companies on all the In reading financial statements, we pay special care to if it announced the aging of accounts receivable,Womens Gucci Pumps, to determine whether the bad debt reserve in consensus with aging, is deserving to the long time to jot off arrears or bankruptcy can not pay each other receivables respectively; If the respond is

since 2002, always listed companies ashore the China Securities Regulatory Commission conducted a review of financial accounts of the excursion, bad debt reserves and depreciation are the converge of the reiterate, the results of a colossal number of companies because breach of accounting criteria apt carry out mysterious operations, namely to be a warning or punishment, they were forced to improve the financial statements. But, for I mentioned earlier, no stuff how numerous unlawful companies SFC punishment, the punishment has little,Gucci Shoes, whether investors do not shield their rights and interests of mediocre feeling, similar accounting fraud incidents ambition inevitably be reiterated another and again, the loss of investors will be difficult to avert.

three, the largest dark hole - a lot of investment in fixed assets
is the history of Chinese listed companies to raise funds for persisted investment in fixed assets of the history, and they issue shares to investment in fixed assets, additional allotment is to investment in fixed assets, delivery of profits is not to retention money for investment in fixed assets. In the eclipse of investment in fixed assets, whether hidden traces of illegal operations?

the company's investment in fixed assets is an important entry point for false accounting, but the false accounts can not do too many. Company may accidentally exaggerate the cost of investment in fixed assets, took the opportunity to convey funds, so that shareholders have underwent losses; also deliberately underestimating the cost of investment in fixed assets, or the muse enhancement of the financial statements of investment in fixed assets in the cycle, decrease costs or expenses for each year , to raise the company's net profit - these are limited exaggerated or underestimated. If a company made investments in fixed assets of the hands and feet too distant, it is easy to see true functions of people, because fixed assets are not mobile, very easy to review; notwithstanding its market price is often difficult to estimate, but the investment cost, or can be estimated The. If you want to diagram out a regulatory administration listed companies have a large investment in fixed assets of water, just send some of the fixed asset valuation experts to the site have a look, do a simple survey, the fact can be known to all. The fact is so simple, but in China, there are still many false investments in fixed assets has not been revealed, both regulators and investors, which lack sufficient vigilance.

If an investor in firm asset investment fraud phenomena have vigilance, he should be investigated from the perspective of the following: listed company is committed to investment in fixed assets has not completion within the scheduled time? For sample a company began in 2000 a new plant building, completed in 2003, promised, but in 2003 they announced the postponement of the annual report, it is questionable. Moreover, the project achievement does not mean that yield benefits, many projects completed after months or even years still can not activity a behalf, or just variant reason to play a behalf revamp, which is more dubious. If the Board of Directors in the annual report and quarterly report does not apparently annotated, we have every reason to mistrust that the company busy in

present, the number of listed companies showed high fixed assets investment projects of long-term trend, the funds mortgaged several hundred million dollars or even billions of dollars at every turn, the project construction phase of three to five at every turn years or even 7 or eight years, just completed construction crown very long time, not to mention the benefits of play. Such a long construction duration, so the slow pace of investment, to provide false accounts of listed companies in the plenty space, than those Even if the survey clearly and often must wait until the project is nearing completion, at which point the loss of investors has been difficult to avert.


Fourth, the impalpable , less threaten to be found. Because in the income statement, the main business than other business records relative to many more, the main business revenues and prices have to be properly enrolled, other business registration takes only a simple profit on it. For industrial companies, the main business income of ######## goods in large quantities to be forged documents (that is false, will not notice.

investors may must eradicate doubt, many of the board of managers of listed companies often play word games, to some vague business in the investors will be fooled a little careless. Such as a public company in its annual report the included in other operating income, which is obviously the annual report of the controversy is contradictory. In China's capital market below the present chaotic situation, we can not rule out some of the company to an operating profit also included in As an ordinary investor, we can not thoroughly investigate a company's profit

Chinese investors and the media do not realize the securities of listed companies business, but keen on Many companies publicized that Real estate manufacture in recent years, high heat, many listed companies have a face-lift to do real estate, real estate began as a short-term is to , medication, import and backup even more renowned tourist resorts and other industries have similar incidents. Pursuit of profit, of course, is the capital of ecology, but as a heap of of capital, socially responsible company, so short-sighted pursuance of short-term profits, there is no prospect of long-term tactics of the company, shareholders would be prejudicial to the long-term interests of society as a whole. This short-sighted negate tendencies must be restrained, but only rely on the power of the SFC and the investor is unlikely to be effectively curbed, the citizen blueprinting department must rely on the macro-control, hope to retard the spread of these stocks has long been morbid. Was famous on the Chinese stock market the tide of real estate assumption. Day Dream was (has been renamed an unsatisfactory return on net assets less popular stocks. Thus, from a less popular to more popular sectors of industry, does not necessarily guide to corresponding increase in performance; if all listed companies to squeeze a few peppery sectors, the consequences must be disastrous.

5, debt repayment capacity
fathom a company's debt repayment aptitude, there are two main criteria: First, liquidity ratio, which uses the company's current assets over current liabilities on; the second is the liquid ratio, which uses the company's liquid assets (especially cash and marketable securities, accounts acceptable, other receivables and other assets accomplished accessible) than the current liabilities. The stream is generally deemed that the proportion of industrial enterprises ought be greater than 2, quick ratio should be greater than 1, or money stream problems may occur. But not the same standards in assorted sectors can not be generalized. Currently all the major stock stock analysis software and specialized financial ratio sites have partitions, in counting to current ratio and quick ratio, the common also includes cash flow, inventory turnover rates, etc., affair prospects for the analysis of these data are momentous character.

current ratio and quick ratio and cash flow are very closely related, of special note liquid is often accompanied by the mushroom in the proportion of net cash inflow of liquid is accompanied by a decline in the proportion of net cash outflow, because the cash is the most important liquid assets. However, some enterprises in the case of lack of cash is still capable to maintain a higher quick ratio, because most of their liquid assets are accounts receivable and other receivables, which is very low quality liquid assets The. In this case, it is necessary to survey the firm's ratio of cash and current liabilities, if the cash ratio is very risky too. Many listed companies is through the manipulation of accounts receivable and other receivables, while raising profits, while maintaining the solvency of the illusion of a steady stream of fraudulently acquired from the bank in the hands of new loans. As ordinary investors should bear in mind: only cold cash is the most real, if cash is bad, no matter how difficult the circumstance of other trust.

If a company's current ratio and quick ratio, well, cash and very abundant, we can entirely trust it? The answer is no. Cash is certainly true, but it should also look at the coming of cash - cash generated from operating activities, investing activities generated cash or cash generated from financing activities? Cash generated from operating activities indicates the long-term viability of the enterprise, the cash generated from investing activities of investment reaction to the vision of corporate management, financing activities, cash only show businesses the ability to raise capital from outside, such as loans, issuance of stocks. Placement of shares of companies listed or just generally have plenty of cash, this does not mean that it is a good company. On the inverse, to fraud and nestle for the center of profits, this model can keep doing this circulate until there is insufficient money to ring up. Both to manipulate profits from the hands of misappropriating investors,Womens Gucci Casual Trainers, but also to the hands of swindling money from the bank; from shareholders to hand the money chapter of the circle can be transferred out, part of the debt accustomed to nourish the capacity to surround the more money the next step. This mode can only occur in misappropriating a very non-standard such as China's capital market, but this does not regulate the capital market is in a state of half dead, circle to the fewer and less funds, even if no one found his true features, such model still can not assist the sequel of the collapse itself. In the Chinese stock market, a lot of people doing similar actions in the company, but a inconsistency in degree, many companies are still at large, waiting for the market to pick up one daytime and continue the excellent cause of misappropriating fraud.

VI means of false accounts of listed companies in China stock market synopsis
whenever a major disgrace, when childish investors deceived by listed companies, investors are all online wrote - good investment conditions, but most importantly, investors should be responsible for their own investment, the fact has testified that China is the biggest blind ordinary investors. not only professional analysts can see through, ordinary investors should be conscious of. Unfortunately, most of China's stock market investors still do not know to read financial statements, and even professional analysts are often sudden, common-sense jokes, such a capital market that only can be described as childish.

Some people think that all of China's capital market problems are institutional problems, as long as the system be well, and the West emerged. But the most recent years, China in the financial, securities and corporate governance efforts to learn the Western system is quite substantial, but still an endless stream of false violations, the capital market has been stuck in the brim of collapse. Whether we are lack of good system or a lack of implementation of the system of good people?

Yes, China's capital market system, there are many very serious problems, but the problem is not all the system, by contrast, is one of the more serious problem. We will not only improve the overall quality of workers in the capital market, but also to improve the overall quality of investors, to make the infant becomes more mature market. Thus, a major illegal operations can be sipped in the bud, the investor's attribute can be certified.

Remember, in order to see through and conquer the false accounts, we absence a mature system, we need more sophisticated investors.