On Accounting Falsification Paper 1 On Enterprise Accounting Information Falsification
In recent years, the US Securities and Exchange Commission has conducted a large-scale investigation on China's listed companies on American stock exchanges. The reason is that some listed companies in China have false financial reports, resulting in a large number of listed companies in the United States and China being implicated, even those listed companies in China with good qualifications have not been spared. Some China concept companies have been attacked in the US capital market because they are suspected of fraudulent listing and continue to falsify after listing. Hunting? It caused great losses to these listed companies, and some brokers began to prohibit investors from buying Chinese concept stocks with margin, which cast a shadow over Chinese concept stocks. In China's Shanghai and Shenzhen stock exchanges, the financial statements suddenly change face in the second year of listing, which brings unnecessary losses to investors and makes investors worry about whether their stocks will become the next mine. People can't help asking: What's wrong with the current accounting information?
Keywords: accounting information fraud countermeasures
Accounting information refers to the information that an accounting unit discloses its financial status and operating results to investors, creditors or other information users through financial statements, financial reports or notes. In the real society, shareholders, creditors, government departments, investors, etc. Everyone knows the situation of an enterprise from accounting information, so the authenticity of accounting information directly determines the return of those who know accounting information.
In recent years, the Securities and Exchange Commission of the United States has conducted a large-scale investigation on China's listed companies in the United States. The reason is that some listed companies provided false accounting reports, which led to the loss of China Concept Company in the American capital market. Hunting? Even some brokers prohibit investors from buying Chinese concept stocks, which has caused great losses to Chinese concept stocks. In China's Shanghai and Shenzhen stock exchanges, companies that suffered huge losses in the second year of listing also appeared from time to time, which brought some losses to investors and made investors cast a vote of no confidence in the accounting information of listed companies. People can't help asking: What's wrong with the current accounting information?
In fact, the falsehood of accounting information includes intentional falsification and unintentional falsification of accounting personnel. This paper mainly talks about deliberate falsification of accounting information.
First, the connotation of accounting information fraud
Falsification of accounting information refers to the behavior that the relevant economic person violates the relevant state system for his own benefit, or violates the objective facts of economic activities without violating the relevant state system, resulting in the loss of authenticity and reliability of the accounting information provided.
Second, the main body of accounting information fraud
There are two main bodies of accounting information fraud: one is the managers of enterprises, who are the decision makers and commanders of accounting information fraud, and also the demanders of accounting information fraud; The other is accounting practitioners, who are the concrete operators of accounting information fraud.
Third, the motivation of accounting information fraud.
Different counterfeiters have different motives.
(A) enterprise managers
1, the motivation of listed companies to falsify is to constantly report to the capital market? Circle money? ; Or want to raise the market price of the company's stock and profit from it; Or let the company? Turn losses into profits? , remove it? ST？ Or? *ST？ Hat.
2. Managers of non-listed companies cheat for heads? Usha? As a capital for upward promotion; Or defrauding bank loans; Or pay less taxes; Or private? Small vault? Enrich yourself.
(2) Accounting practitioners
Accounting practitioners have to cheat under the pressure of managers in order to keep their jobs.
Fourth, the harm of accounting information fraud.
The harm of accounting information fraud is very great, which is embodied in:
(A) false information provided by accounting fraud will seriously mislead all kinds of decision makers, lead to confusion in market behavior, and even the relevant national decision makers make wrong decisions and undermine the market operation mechanism.
(two) undermine the seriousness of the national financial regulations and accounting system, and disrupt the social and economic order.
(3) Infringe on the lawful rights and interests of shareholders, creditors and investors, which may cause them to suffer huge economic losses.
(four) tax evasion, resulting in the loss of state tax revenue.
(5) Covering up personal corruption, causing losses to the country, and some people enrich themselves.
(six) in the securities market, seriously misleading investors, increasing market volatility, affecting the order of the securities market, and making investors lose confidence in the capital market.
(VII) In foreign securities markets, listed companies in China have encountered a crisis of confidence due to fraud, which directly affects the national image.
Verb (abbreviation of verb) is the expression of accounting information fraud
(1) The accounting voucher is untrue. Mainly by fabricating false accounting vouchers; Or provide false original vouchers, resulting in false accounting information from the beginning.
(2) establishing false accounting books. Mainly private? Small vault? Set up two sets of accounts, one for the internal use of managers and the other for the supervision and inspection of relevant functional departments, in order to cover up the real business situation of enterprises, evade state taxes and occupy state property.
(3) Providing false accounting statements. There are two main types of false accounting statements of enterprises: first, inflated assets and profits; Second, inflated liabilities and concealed profits. The former is mainly state-owned enterprises and listed companies, because the performance of state-owned enterprises directly affects the promotion of business leaders; The operating performance of listed companies directly affects the company's stock price. The latter are mainly limited liability companies funded by private enterprises and individuals, because such enterprises do not pay attention to performance, but are more concerned about how to evade state taxes.
Six, the reasons for accounting information fraud
Accounting information fraud has become a common phenomenon in China. Basically, there is no company that does not have the problem of fraud. Whether it is a big company or a small company, it has become a social phenomenon with its deep-seated reasons:
(A) the reasons for the quality of accounting practitioners themselves
1. Some accounting practitioners have limited ability. Most accounting practitioners have not participated in professional accounting training, and most schools in China provide theoretical knowledge and lack practical experience. Once in the actual accounting operation, I don't even know where to start. However, China's accounting system is still improving, so they can't learn and master new skills from the new accounting system in time. Although China adopts the system of holding certificates, it lacks execution in actual operation, and many accounting practitioners do not have employment certificates. Although the financial department requires employees to participate in follow-up training every year, it is often a mere formality, which does not greatly improve the ability of accountants.
2. Some accountants have low moral standards. Driven by material interests, they often cooperate with managers, forge and destroy accounting information by various means, take advantage of their positions, steal from the inside and embezzle state and collective property.
3. Some accounting practitioners, under the pressure of leaders or driven by interests, do not follow professional ethics, take the initiative to make suggestions for leaders, make false accounts, set up two sets of accounts, and set up accounts privately? Small vault? Providing false accounting information, whitewashing performance, concealing income, evading taxes and seeking personal gain.
(B) China's system is not perfect.
1, China's accounting standards are still in the process of continuous improvement. Although accounting standards have been greatly improved in recent years, there are still some defects and loopholes, and some laws and regulations are still seriously lagging behind, lacking predictability and operability in actual operation.
2. China's accounting standards are not mandatory, and many enterprises may or may not adopt them, which leads to the lack of comparability of similar enterprises.
3. Most enterprises in China have not yet established a scientific modern enterprise management system, and some enterprises' own systems are not perfect, or although there are various systems, they have not followed them, which makes the systems form a decoration and have no effect.
4. Some unit leaders are arbitrary, which provides objective conditions for accounting information fraud.
(C) the lack of effective supervision mechanism
Theoretically, although China has a trinity supervision and management system of accounting supervision, auditing supervision and external supervision, there are many problems in actual operation.
1. In accounting supervision, because accounting practitioners are employers, they can only serve the leaders, accounting supervision exists in name only, and it is even more impossible to supervise economic activities such as financial revenue and expenditure of the unit.
2. From the perspective of audit supervision, first, the internal audit supervision system is not perfect, the system is not perfect, the internal containment system is weakened, the boundary between power and responsibility is unclear, and the internal supervision cannot play its role independently, which can not fundamentally curb the phenomenon of accounting fraud; Secondly, the external audit supervision is weak. At present, China's external supervision is mainly reflected in private audit. Some private audit units obey the requirements of the audited units for their own interests and cooperate with the audited units to falsify, resulting in a large number of false audit reports.
3. From the perspective of external supervision, the departments of finance, taxation, auditing, price and so on are fragmented, and there is no resultant force, and the management is fragmented, so that the overall supervisory role cannot be effectively played.
4. From the perspective of law enforcement supervision, although there are various law enforcement inspections every year, it has not fundamentally solved the problem of accounting fraud. The fundamental reason is that the law enforcement is not strict and the problems found are not dealt with seriously, which leads to the continuous occurrence of accounting fraud incidents. China's "Criminal Law" and "Accounting Law" have made penalties for accounting fraud, but in actual operation, the law enforcement is not strict and the punishment is not strong enough to play a disciplinary role; In addition, illegal acts are often settled by fines, without criminal punishment, and economic punishment is borne by counterfeiters, without punishment for managers, which leads to counterfeiters' boldness; In addition, the cost of accounting fraud is low and the economic penalty is small, which has no deterrent effect on counterfeiters and condones the proliferation of accounting information fraud to some extent.
(D) the result of the separation of the two rights
The separation of two rights refers to the separation of ownership and management rights, that is, most operators are not capital owners, which has caused contradictions between the two sides. Owners demand a higher rate of return on capital to achieve the maximum surplus of the enterprise. However, in practice, the problem of surplus distribution often occurs. The owner wants to get all the surplus, while the operator wants to keep part of the surplus for enterprise development or personal salary and benefits.
(E) Driven by economic interests
Some operators, especially those in state-owned enterprises, are often linked to their political achievements in promotion, so they are often for themselves. Usha? Taking enterprises as the capital for promotion will increase profits at all costs. The leaders of local governments will connive at corporate fraud for the sake of the image and good political achievements of local or departmental organizations. For private enterprises, fraudulent bank loans and tax evasion require a false statement.
Seven, accounting information fraud countermeasures
(A) to strengthen the quality of accounting practitioners, improve professional ethics
Accounting information is provided by accounting practitioners, so the quality of accounting practitioners is particularly critical. It is necessary to strengthen the training of accounting practitioners, constantly improve their professional skills, improve the level of implementing the new policy, and make them constantly update their knowledge. At the same time, it is necessary to strengthen the professional ethics of accounting practitioners and correctly handle the interests of the state, the collective and the individual. Improve the position of accounting practitioners in enterprises, make them realize the importance of work and enhance their sense of responsibility.
(B) establish and improve the internal control system
Internal control system is an internal control mechanism that all departments of an enterprise consider to be mutually restrictive and interrelated. Perfect internal control system can effectively prevent accounting fraud. Perfect internal control system includes: post separation system, leadership responsibility system, independent supervision system and clear reward and punishment system.
(3) Improve the legal system
At present, China's accounting laws and regulations are still far from perfect. We should take accounting law as the center, constantly improve these laws and regulations, and constantly improve the legal system, so that there are laws to follow, laws to be observed, law enforcement to be strict, and violators to be prosecuted. In particular, it is necessary to increase the cost of accounting violations, increase the criminal responsibility of the person in charge of the enterprise for accounting violations, and strengthen the protection and reward for accounting practitioners who dare to say no.
(four) the implementation of accounting personnel appointment system.
At present, accounting practitioners are all led by the employed enterprises, and their wages are also paid by the employed enterprises, which must largely obey the management of the employed enterprises. Sometimes it's not that accounting practitioners want to provide false statements, but that they are easily fired and have to be managed by others if they don't do it. We can completely adopt the appointment system, and the financial department will set up a special accounting appointment department. All accounting practitioners are managed by this department and trained in a unified way. Expatriates shall be subject to vertical management, and the dispatched personnel shall represent the national interests, and their wages, bonuses and welfare shall be paid by the appointed department. The accounting appointment department of the finance department regularly collects fees from enterprises as the wages of expatriates. According to the enterprise situation, each enterprise applies to the accounting appointment department of the finance department for employment indicators, and the accounting appointment department sends people to provide suitable candidates to enter the enterprise, which is only managed by the enterprise and is not limited by the enterprise, and rotates posts within a certain period of time to avoid being tempted by the enterprise economy.
In a word, accounting information fraud, as a common phenomenon in current society, seriously disrupts the economic order and affects the true reflection of accounting on various economic activities. It is also urgent for the state to speed up the improvement of the security system, strengthen management and supervision, and create a healthy and orderly social environment. Accounting practitioners should also start from me, resolutely crack down on false accounts, and return the truth to society.
References:
[1] Accounting fraud. MBA think tank encyclopedia network
[2] Economic analysis of accounting fraud. Encyclopedia of China.
[3] Talk about the countermeasures of accounting information fraud. Accounting net, China
On Accounting Falsification Part II Accounting Falsification Analysis and Audit Countermeasures
Abstract: This paper briefly introduces some common methods and harms of accounting fraud in Chinese enterprises. According to the different forms of accounting fraud, this paper probes into the auditing methods that auditors should adopt.
[Keywords:] accounting whitewash accounting fraud and its harm
Accounting fraud refers to the behavior of enterprise leaders and financial accountants who violate national laws, regulations and standards, make false accounts and prepare false accounting statements in the accounting process.
From the perspective of accounting information, accounting fraud can be divided into two types: accounting fraud and accounting statement fraud. Falsification of accounting statements is a deliberate misreporting of certain financial values, resulting in the illusion of enhancing profitability, thus deceiving shareholders and creditors and other stakeholders. Accounting fraud is usually aimed at helping theft or transforming company assets into personal ownership or use.
Accounting fraud is very harmful, which is embodied in:
The false information produced by accounting fraud will seriously mislead all kinds of decision makers, which will lead to misleading market subjects and even relevant national decision-making institutions to make wrong decisions and undermine the market operation mechanism; Destroy the seriousness of the national financial regulations and accounting system and disrupt the social and economic order; Infringe on the legitimate rights and interests of shareholders, creditors, customers and employees of the company, causing them to suffer huge economic losses; Concealing income, falsifying expenditures, evading state taxes, resulting in the loss of state taxes; Encourage the breeding of personal corruption; The immature securities market is impacted by false and false information, which seriously misleads the behavior of securities investors, destroys the rules of the market game, intensifies market speculation and market fluctuation, and affects social stability.
The final result of accounting fraud is that the country suffers, and a few people enrich themselves.
First, the form of accounting fraud
At present, there are two main types of enterprise accounting statement fraud: one is to inflate assets and profits; Second, inflated liabilities and concealed profits. The former is mainly state-owned enterprises and listed companies, because the performance of state-owned enterprises directly affects the promotion of business leaders; The operating performance of listed companies directly affects the company's stock price. The latter is mainly limited liability companies funded by private enterprises and individuals, because such enterprises do not pay attention to performance, but are more concerned about how to evade state taxes and collect less apportionment from relevant government departments.
1. Inflated assets
(1) expense capitalization
The expenses incurred by the enterprise in the current period shall be included in the cost of product production (or commodity management) or the period expenses. However, some enterprises include some expenses that should be included in the current period in asset accounting subjects such as deferred expenses, deferred assets and intangible assets, which makes the current profit and loss of enterprises untrue; Some enterprises' prepaid expenses are not fully amortized in time, but are long-term accounts, and the expenses belonging to the period expenses are listed as assets. By capitalizing expenses, enterprises have inflated their assets and owners' equity.
(2) False inventory
Some enterprises have accumulated goods for many years, or obsolete materials that should be scrapped are not accounted for, or the actual price (or realizable price) of inventory is obviously lower than the historical cost value of the book, but it is still hung on the inventory account according to the historical cost, and the inventory value is untrue, which violates the principle of prudence confirmed by the accounting standards for enterprises and inflated the inventory value of enterprises.
(3) the value of fixed assets is inflated.
The false high value of fixed assets of enterprises is mainly manifested in insufficient depreciation, intangible losses caused by technological progress, unusable damaged or unnecessary fixed assets not being disposed of. , inflated (subtracted) enterprise assets.
(4) Insufficient amortization of deferred assets and intangible assets.
Deferred assets and intangible assets shall be amortized in full and on time. The obsolete intangible assets should not be included in the intangible assets account, and their amortized value should be included in the profit and loss as a period expense. However, many enterprises do not make corresponding financial treatment for intangible assets that have no value or can no longer bring expected economic benefits to enterprises, and still record them as assets, thus inflating enterprise assets.
2. False liabilities
(1) overestimates accounts payable.
Many enterprises' accounts payable are not checked and liquidated with their counterparts in time or every year. Unpaid accounts payable that should be returned in a business cycle of one year or more are common. It is not uncommon that accounts payable that have been more than three years (excluding long-term accounts payable) and creditors that no longer exist are still in suspense. The actual debt payable of the enterprise is less than the financial book debt, and the accounts payable of the enterprise are overestimated.
(2) The accrued expenses are untrue.
In order to adjust the current profit and loss, many enterprises do not make provision for expenses according to the requirements of accounting standards and accounting systems for enterprises, but adjust the profit and loss according to the needs of enterprises. Some enterprises should or should not withdraw more accrued expenses and write them off in time, which leads to the untrue accounting subjects of accrued expenses.
3. False profit and loss
(1) Overcounting income and under-counting expenses
Some enterprises record unrealized income as income in order to achieve a certain goal, such as confirming the realization of income before the completion of labor services or projects; Some enterprises fabricate customers to make false sales invoices and falsely list sales income and accounts receivable; Some enterprises do not include the expenses that have occurred in the cost, or deliberately transfer the costs according to the matching principle when carrying forward the costs, resulting in the production costs of enterprises and the book amount of inventory goods far exceeding the actual inventory amount; Some enterprises put the relevant expense documents in the open account of the bank for use. Open account? Cheating and adjusting profits.
(2) Less income and more expenses.
In order to achieve the purpose of paying less or not paying income tax, the enterprise does not confirm normal sales according to the income confirmation conditions, especially sales that do not need VAT invoices, but hangs the same amount in advance accounts or other payables for a long time; Some enterprises adopt the methods of falsifying expenses, raising more expenses and spreading more expenses to achieve the purpose of falsifying profits.
(3) Long-term losses of projects under construction shall be capitalized by borrowing costs that should be included in profits and losses.
When an enterprise builds its own fixed assets, it needs to accrue loan interest on schedule, and this part of loan interest should be capitalized before the project under construction reaches the scheduled usable state. Some enterprises have already completed their projects, and long-term liabilities and loan interest are still included in the cost of projects under construction, thus reducing the current financial expenses and depreciation, thus inflating profits in two ways.
(4) Adjust the report at will
In order to achieve some illegal purposes, some units arbitrarily adjust the amount of statements and artificially increase the profit of asset adjustment; Or increase costs and reduce profits to avoid tax evasion and inspection. For example, in order to increase the management expenses, the management expenses are directly calculated in the profit and loss, and at the same time, the amounts of accounts receivable and bad debt reserves are increased in the balance sheet, which leads to the inconsistency between the statements and accounts.
Second, the countermeasures to be taken in the audit process
Auditors should adopt different auditing methods according to different forms of accounting fraud.
1. Audit method of false inventory
Supervise the audited entity to standardize accounting in accordance with the provisions of the accounting system and do a good job in inventory foundation; According to the provisions of the auditing standards, strictly implement the inventory supervision procedures. Before the implementation of supervision, fully communicate with the audited entity and make a detailed and operable plan; As far as possible, the inventory supervision will be arranged when the audited entity organizes the year-end inventory to reduce the workload and time difference; When implementing inventory supervision, we should not only check the inventory quantity, but also pay attention to its quality.
2. Audit methods of fictitious sales and fictitious accounts receivable
First, check the annual production capacity and production scale of the enterprise and compare the sales volume of the enterprise to see if there is any abnormal situation that the total sales volume is greater than the production capacity; Second, check the original documents such as sales contract, bill of lading and delivery records at the end of the year and the end of the season to see if there is a bill of lading, whether the procedures are complete and whether there is any abnormality; The third is to confirm the confirmation letter sent by the customer unit, ask the sales department for the detailed account and statement of the customer, and check with the detailed account of the customer's arrears provided by the finance department to confirm whether the other unit owes money.
3. The audit method of transferring less costs and inflating profits.
Less sales cost will lead to the book amount of enterprise inventory is much larger than the actual inventory amount. The audit methods of this fraud are: first, check whether the cost carry-forward method follows the principle of consistency; Second, through the valuation test, see if the unit price of the enterprise's ending inventory is abnormal; The third is to compare the quantity and amount of the actual inventory of the enterprise with the quantity and amount of the book inventory through spot checks to see if there is any difference.
4. Audit method of concealing profits by not recording sales income and other payables or accounts received in advance.
Countermeasures should be taken in the audit: first, check the quantity of purchased goods and ending inventory and check with the book quantity to see if there is any abnormality; Second, check the original documents to see whether the basis of their personal accounts is reasonable and sufficient; The third is to confirm the real situation of some accounts received in advance with large amount and long-term immobility.
5. Audit methods that current expenses are not included in profits and losses and inflated profits.
The enterprise falsely lists the operating expenses and management expenses incurred in the current period in such subjects as prepaid expenses, deferred assets, intangible assets and other receivables. , excluding profit and loss. In this regard, the main inspection during the audit? Prepaid fee? 、? Deferred assets? 、? Other receivables? Whether the accounting basis is sufficient and reasonable and whether it is amortized according to the income period.
6. Audit method of manipulating profits by changing the depreciation method of fixed assets
First, it is necessary to check whether the original book value and net value of fixed assets are compatible with the service life. For example, some enterprises' houses and buildings have reached the retirement age, and the net value reflected on the books still has a considerable amount; The second is to check whether the depreciation of fixed assets of enterprises follows the principle of consistency, and whether there is any behavior of arbitrarily changing the depreciation period and depreciation method.
7. Change the audit method of investment accounting method to manipulate profits.
When the invested enterprise is profitable, the accounting method of investment income will be changed from cost method to equity method. On the one hand, the profits of the current period can be inflated, on the other hand, there is no need to pay income tax for these increased profits. The audit countermeasure against this fraudulent means is to check the percentage of equity of the invested enterprise in the invested enterprise. According to the relevant accounting system, when the investment income accounts for more than 25% of the equity of the invested enterprise, the equity method can be used to calculate the investment income.
8. Audit methods of capitalization of borrowing costs that should be included in profits and losses, inflated construction expenditures and inflated profits.
In practical work, some units falsely list the indigestible borrowing costs of fixed assets in fixed assets expenditure or projects under construction. In this regard, in the audit, it is necessary to check whether the project under construction of the enterprise has reached the usable state according to the conditions stipulated in the accounting standards, so as to judge whether the handling of borrowing costs is correct.
9. Audit methods of drawing assets impairment reserves and manipulating accounting profits
Auditors first investigate the asset market and compare it with the book value of the enterprise to see if there are abnormal assets; Secondly, check whether there is sufficient basis for enterprises to make provision for impairment. If there is evidence that the impairment reserve for adjusting profits has been accrued, it shall be adjusted retroactively in accordance with the provisions of the enterprise accounting system, and the profits of the current year shall not be increased.