[Flashback] Accounting Scandals Galore, China Not Enron-Bound


Posted by WOO Jiacheng, Year 4 undergrad at the School of Accountancy, Singapore Management University

China has always had its fair share of naysayers, but last week’s decision by one mid-sized Connecticut broker dealer to ban margin trading on Chinese equities has vindicated them. Is corporate China run by a bunch of CEOs like Kenneth Lay of the infamous Enron?

On June 8, Interactive Brokers told clients that it would not allow them to buy some Chinese stocks on margin. The news made it to CNBC. China equities underperformed its big emerging market peers, and the MSCI Emerging Markets index, over the next two days over accounting fears. The margin ban went into effect on Monday. Continue reading


[Flashback] Where was SEC as trouble festered at Chinese companies?


Posted by WOO Jiacheng, Year 4 undergrad at the School of Accountancy, Singapore Management University

Alarmed by widening accounting debacles at U.S.-listed Chinese companies, American regulators are scrambling to stem the damage from gaps in laws adopted to protect investors after the Enron scandal a decade ago.

U.S. investors had risked billions of dollars on hundreds of companies based in China – under a belief they were subject to U.S. rules when they sell and list shares in the United States – but a lot of that money has gone up in smoke.

The accounting blowups have humbled some prominent American investors such as top hedge fund manager John Paulson and former AIG CEO Maurice “Hank” Greenberg, spawned lawsuits and prompted a broad investigation by U.S. regulators. Continue reading

The logistics of committing fraud on an industrial scale; “Think big and implement to the finest detail” was the motto of Chun Chi-wai, chairman of China Metal Recycling (CMR), once the darling of fund managers and stock commentators


The logistics of committing fraud on an industrial scale

Friday, 13 March, 2015, 9:41pm



“Think big and implement to the finest detail” was the motto of Chun Chi-wai, chairman of China Metal Recycling (CMR), once the darling of fund managers and stock commentators.

Judging from the way he cooked the company’s books, the 44-year-old entrepreneur practised what he preached.

“This was fraud on an industrial scale,” said Mr Justice Jonathan Harris while approving an unprecedented winding up application by the Securities and Futures Commission against CMR. Continue reading

Pamela Meyer: How to spot a liar

Posted by Padma LAU Heng Ee, Year 4 undergrad at the School of Business, Singapore Management University

On any given day we’re lied to from 10 to 200 times, and the clues to detect those lie can be subtle and counter-intuitive. Pamela Meyer, author of Liespotting, shows the manners and “hotspots” used by those trained to recognize deception — and she argues honesty is a value worth preserving.

Ping An unit put on disclosure ‘blacklist’; Rating agency says Lufax.com failed to disclose debtor information


Ping An unit put on disclosure ‘blacklist’

Saturday, 14 March, 2015, 6:00am

Bloomberg in Beijing

Rating agency says Lufax.com failed to disclose debtor information

An online peer-to-peer finance platform owned by mainland China’s second-largest insurer has been put on a “blacklist” by a rating company, which cited reasons including failure to disclose debtor information. Continue reading

Untangling New Lease Accounting Rules; To get around this complexity and burden, companies might try to stop doing leases and start structuring them as service contracts


March 13, 2015, 2:44 AM ET

Avolon CFO: Untangling New Lease Accounting Rules


Editor, CFO Journal

Avolon Holdings Ltd.AVOL +0.42%, a global aircraft-leasing company based in Ireland, went public in December on the New York Stock Exchange and had its first quarterly conference call last week. U.S. accounting regulators are debating sweeping changes for long-term capital leases, and CFO Journal Editor Noelle Knox spoke at length about the ramifications with Avolon Chief Financial Officer Andy Cronin. Here is an edited excerpt:

The Financial Accounting Standards Board is evaluating how to change standards for lease accounting. Will the variations between U.S. and international standards be a challenge to manage? Continue reading

[Flashback] BRE-X: Inside The $6 Billion Gold Fraud That Shocked The Mining Industry


Posted by Idu Inu Yati, Year 3 undergrad at the School of Accountancy, Singapore Management University

In 1993, a prospector named Michael de Guzman walked out of the jungles of Borneo with extraordinary news: he found gold.

This is according to MasterMinds, a Canadian true crime documentary television series produced by truTV.

For the next three years, de Guzman produced thousands of core samples riddled with gold. Canada’s CBC News has a detailed timeline of the events. Continue reading

ACCT004 Course Quote by Pixar’s Founder Ed Catmull


“ARPA’s mandate – to support smart people in a variety of areas – was carried out based on the unwavering presumption that researchers would try to do the right things and, in ARPA’s view, over-managing them was counterproductive. ARPA’s administrators did not hover over the shoulders of those of us working on the projects they funded, nor did they demand that our work have direct military applications. They simply trusted us to innovate. This kind of trust gave me the freedom to tackle all sorts of complex problems, and I did so with gusto. Not only did I often sleep on the floor of the computer rooms to maximize time on the computer, but so did many of my fellow graduate students. We were young, driven by the sense that we were inventing the field from scratch – and that was exciting beyond words. For the first time, I saw a way to simultaneously create art and develop a technical understanding of how to create a new kind of imagery. Making pictures with a computer spoke to both sides of my brain. To be sure, the picture that could be rendered on a computer were very crude in 1969, but the act of inventing new algorithms and seeing better pictures as a result was thrilling to me. In its own way, my childhood dream, was reasserting itself. At the age of 26, I set a new goal: to develop a way to animate, not with a pencil but with a computer, and to make the images compelling and beautiful enough to use in the movies. Perhaps, I thought, I could become an animator after all.”

– Pixar’s founder Ed Catmull