Posted by Low Hwan Hong, Year 4 undergrad at the School of Business, Singapore Management University
According to a Xinhua report, a “cooperative” that had absolutely no financial qualifications meticulously decorated their interior to resemble that of a state-owned bank and used high interest rates to entice city residents to come deposit their money, scamming nearly 200 people in just over a year, involving nearly 200 million yuan [RMB]. Continue reading
Auditors Ask Cos to Keep Their Books in Order Before April ’16, from when issues like fraud in a firm they examine could land them in jail. Under the new Companies Act, the board of directors and the auditors will be held responsible for fraud or discrepancies in company operations.
Sachin.Dave@timesgroup.com
6 February 2015
The Economic Times – Delhi Edition
Auditors are prodding the companies they audit to set their house in order before April next year, from when issues like fraud in a firm they examine could land them in jail. Under the new Companies Act, the board of directors and the auditors will be held responsible for fraud or discrepancies in company operations. Starting this year, directors will have to comment on the existence and effectiveness of internal financial controls in their board report. External auditors have one more year to report on their assessment of the existence and effectiveness of these controls, say industry trackers. Once the regulations become applicable, the onus will lie on the auditors to ensure that the books of the companies they audit are clean. Starting 2016, the external auditor could face up to 10 years of jail term for failing to raise red flags about frauds. Continue reading
Former HealthSouth CFO who served jail time after accounting fraud writes ethics playbook
Ryan Phillips
5 February 2015
Birmingham Business Journal Online
Aaron Beam, a business ethics speaker and founding chief financial officer of HealthSouth Corp. (NYSE: HLS), has penned a new book on business ethics. Beam said his newest book, “Ethics Playbook: Winning Ethically in Business,” stands out against other works in the field of ethics by providing lessons to help avoid unethical business practices. Beam is able to relate these lessons to readers because of his involvement in an accounting fraud scheme at HealthSouth under then-CEO Richard Scrushy. Beam surrendered to federal authorities in 2003 and served time in prison before becoming a public speaker in 2009. “It’s not a text or highly academic,” Beam said in a written statement. “It’s got practical ideas and principles that people can use to avoid the pitfalls of unethical business practices—in whatever career stage they’re in. I learned my lesson the hard way, but that doesn’t mean they have to.” He will have a book signing event in Birmingham next month. The event will be held at Workplay and is scheduled for Thursday, March 5., from 5:30 p.m. to 7:30 p.m., according to a release from Beam.
http://english.caixin.com/2015-02-05/100781920.html
CBRC Warns Public Not to Fall for High-Interest Scams at Banks; Regulator provides details of fraud schemes involving banks in Changsha and Hangzhou, then says people shouldn’t be so greedy
By staff reporter Gao Xinli
(Beijing) – The banking regulator has warned the public to be wary of scams that attract depositors with the lure of high interest rates, citing two cases in which depositors at two banks lost large amounts. The China Banking Regulatory Commission (CBRC) made the warning on February 4 on its account on WeChat, a popular social media app. It also provided details of some of the tricks scammers were using on depositors. The CBRC first brought up the case of Luzhou Laojiao Co. Ltd., which Caixin has reported filed a lawsuit in October against a branch of Agricultural Bank of China in Changsha, in the central province of Hunan, over the loss of one term deposit. The Shenzhen-listed liquor manufacturer said it made term deposits of 50 million yuan and 150 million yuan with the bank in April 2013. When the second deposit reached its maturity date in September last year, the company checked on the money, but the bank told it the deposit was gone. The CBRC said in its WeChat post that Luzhou Laojiao was the victim of fraud and then provided details of the scam. Several people passing themselves off as bank clerks contacted Luzhou Laojiao about deposit opportunities that offered high interest yields. Continue reading
https://soundcloud.com/bloombergview/barry-ritholtz-interviews-6
Posted by Lin Liye, Year 4 undergrad at the School of Economics, Singapore Management University
Bloomberg View columnist Barry Ritholtz interviews James Chanos, the hedge fund manager of Kynikos Associates. They discuss short selling and the excess of Wall Street. Masters In Business aired on Bloomberg Radio.
Posted by John Soh Yong Ye , Year 4 undergrad at the School of Economics, Singapore Management University
Commonwealth entities should prepare for the 1 July 2015 deadline to appoint independent audit committee members.
The Public Governance, Performance and Accountability Act 2013 (PGPA Act) contains a number of significant changes in the governance of Commonwealth entities.
The accountable authority (secretary/board) of a Commonwealth entity must govern the entity in a way that promotes:
the proper use and management of public resources for which it is responsible;
the entity achieving its purposes; and
the entity’s financial sustainability. Continue reading
http://www.wsj.com/articles/petrobras-ceo-and-5-other-executives-resign-1423055419
Posted by John Soh Yong Ye , Year 4 undergrad at the School of Economics, Singapore Management University
A corruption scandal at Brazil’s Petroleo Brasileiro SA has forced a management shake-up at the big state-run oil company, whose troubles are proving toxic for both President Dilma Rousseff and the nation’s economy. Continue reading
http://www.wsj.com/articles/sec-chinese-affiliates-of-accounting-firms-near-settlement-1423090310
SEC, Chinese Affiliates of Accounting Firms Near Settlement; Chinese Audit Firms of Big Four Accounting Firms Face Sanctions Over Document Sharing
MICHAEL RAPOPORT And JEAN EAGLESHAM
Updated Feb. 4, 2015 6:25 p.m. ET
The Securities and Exchange Commission and the Chinese affiliates of the Big Four accounting firms are close to settling a high-profile dispute that had threatened to complicate the audits and fundraising capabilities of dozens of Chinese companies and U.S. multinationals, according to people familiar with the situation. The prospective settlement would sanction the Chinese audit firms for refusing to give the SEC documents about some of their U.S.-traded Chinese clients that were under SEC investigation. Continue reading
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2535809
Competition of the Informed: Does the Presence of Short Sellers Affect Insider Selling?
Massimo Massa INSEAD – Finance
Wenlan Qian National University of Singapore – NUS Business School
Weibiao Xu National University of Singapore (NUS)
Hong Zhang PBC School of Finance; INSEAD – Finance
December 9, 2014
Journal of Financial Economics (JFE), Forthcoming
INSEAD Working Paper No. 2014/63/FIN
Abstract:
We study how the presence of short sellers affects the incentives of the insiders to trade on negative information. We show it induces insiders to sell more (shares from their existing stakes) and trade faster to preempt the potential competition from short sellers. An experiment and instrumental variable analysis confirm this causal relationship. The effects are stronger for “opportunistic” (i.e., more informed) insider trades and when short sellers’ attention is high. Return predictability of insider sales only occurs in stocks with high short-selling potential, suggesting that short sellers indirectly enhance the speed of information dissemination by accelerating trading by insiders.
http://www.sec.gov/litigation/litreleases/2014/lr23096.htm
Posted by CHEN Liting, Year 3 undergrad at the School of Accountancy, Singapore Management University
The Securities and Exchange Commission (“Commission”) filed a civil injunctive action today in the United States District Court for the District of Columbia charging China Valves Technology, Inc. (“China Valves”), its Chairman and former CEO, Siping Fang (“Fang”), its former CEO, Jianbao Wang (“Wang”), and its CFO, Renrui Tang (“Tang”), with misleading investors about the true nature and price of an acquisition and by mischaracterizing and materially overstating income related to its purchase and reverse engineering of a competitor’s product. Continue reading
AsianExtractor: Unearthing Accounting Fraud in Asia 