Accounting Puzzle Solved -- Research Findings on Financial Fraud by Shanghai National College of Finance: Research Findings on Financial Fraud by Shanghai National College of Finance

Author: Ma Xianming
Publisher:
Publish Date: 2005-05-01
Features: "The Accounting Enigma: Solutions" is the sister book to "The Accounting Enigma." If "The Accounting Enigma" begins with the secret players in the securities market, dissecting the accounting enigmas of the market and allowing readers to see how manipulators exploit various means, including accounting tools, to deceive the public and prey on stockholders, then "The Accounting Enigma: Solutions" tells readers where to find the key to solving the accounting enigma! We believe that solving the accounting enigma should start with tracing the root cause of why accounting becomes mysterious and how it is manipulated. Only by dissecting and analyzing it can we find the correct path to solving it. Without a doubt, further improving and refining China's accounting standards and enhancing the investigation level of financial fraud have become the top priority and the most crucial task. The former serves as the shield against the "accounting enigma," while the latter is the spear to break it.
First, let's talk about improving accounting standards. After nearly two decades of reform and construction, China's accounting standards have made remarkable progress globally, earning high praise from the international accounting community. They have also greatly promoted the rapid development of China's capital market and accelerated the country's reform and opening-up. However, there is still much work to be done in scientifically and rationally clarifying the relationship between accounting standards and accounting systems, more quickly and effectively addressing special accounting issues in China's economic life (such as the power companies, telecom companies, airlines, and road-railway companies mentioned in this book), and avoiding the formation of accounting due to chaotic standard systems and unclear regulations. As the saying goes, "If one is in the dark, how can they illuminate others?" If accounting standards are not properly sorted out, accounting will forever remain a mystery!
Next, let's discuss improving the investigation level of financial fraud. The damage caused by financial fraud to the global economy is undeniable! U.S. scholar G. Jack. Bologna pointed out, "Fraud is far more than just a simple moral issue. In recent years, the scale and complexity of fraud have been increasing, while the direct losses caused by fraud have exceeded at least 100 billion U.S. dollars annually. As financial reporting structures become increasingly complex and business competition intensifies, fraud is becoming harder to detect. For the accounting profession, which bears the responsibility of solving the accounting enigma and reducing the risk of financial reporting information, improving fraud investigation is becoming increasingly urgent." Fraud investigation is currently booming in the U.S. The federal and state governments have now employed over 50,000 anti-fraud experts, distributed across various fields such as the Central Intelligence Agency, the Federal Bureau of Investigation, the Federal Deposit Insurance Corporation, the Internal Revenue Service, and the Postal Service. Before 2001, only 19 universities in the U.S. offered anti-fraud professional courses, but four years later, 150 universities had started to do so.