http://www.ft.com/intl/cms/s/0/e1d13df2-ae1e-11e4-8d51-00144feab7de.html#axzz3R8KNP0iv
Posted by LE Hung, Year 4 undergrad at the School of Information System, Singapore Management University
http://dealbook.nytimes.com/2009/08/17/another-view-shanghai-ed-profits/?_r=1
Posted by Valerie NG, Year 3 undergrad at the School of Accountancy, Singapore Management University
Another View: Tunneling to True Profit in China
AUGUST 17, 2009 10:00 AMAugust 17, 2009 10:00 am
Mark Dixon, a founder of the mergers and acquisitions adviser the1.com, which is active in mainland China, unwittingly unearthed some Chinese accounting tricks while valuing a local company.
What with the world still reeling from the domino effect that Lehman Brothers’ balance sheet had on financial markets, the exposure of accounting frauds like the one at the Madoff fund and the final throes of the expenses scandal in the British Parliament, a trip to China promised to be a breath of fresh air in this atmosphere of fishy finances. Continue reading
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2024826
Posted by John SOH Yong Ye, Year 4 undergrad at the School of Economics, Singapore Management University
Abstract:
Committing financial fraud is a serious breach of business ethics. However, there are few large scale studies of financial fraud that involve ethical considerations. In this study, we investigate the pervasive financial scandals, which by the end of 2012 involved more than a third of the U.S.-listed Chinese companies. Based on a sample of 262 U.S.-listed Chinese companies, we analyze factors that differentiate between firms that commit financial fraud and those that do not. We find that firms more predisposed to unethical behavior, due to their low regional social trust in the home country and low respect for regulations and laws as proxied by political connections, are more likely to commit accounting and financial fraud. They take advantage of low hurdles for listing via reverse mergers and avoid third-party monitoring through poor governance and auditors. Finally, we find evidence after these scandals of non-fraudulent firms differentiating themselves from the fraudulent firms by sending costly signals such as insiders purchasing shares, increasing dividends, and going private.
http://news.asiaone.com/news/asia/china-uncovers-power-abuses-nepotism-oil-giant
Posted by Joel CHUA Yong Sheng , Year 3 undergrad at the School of Business, Singapore Management University
BEIJING – China’s anti-corruption watchdog said on Saturday that it had uncovered evidence of graft at China Petrochemical Corp (Sinopec Group), warning the state-owned oil giant to take strong action to eradicate kickbacks, nepotism and theft.
Sinopec, the parent company of China Petroleum & Chemical Corp , must take steps to stop “power-for-money dealings” and prevent the loss of state assets, the Central Commission for Discipline Inspection (CCDI) said. Continue reading
business.asiaone.com/news/firms-eyeing-growth-anti-fraud-market
Posted by Eugene SAY Gui Hua , Year 4 undergrad at the School of Business, Singapore Management University
AS CORPORATE hacking becomes commonplace and regulators face no shortage of wayward companies to put under scrutiny, the cyber-security and anti-corruption business is growing fast.
The market for fraud investigation and dispute services in the Asia-Pacific region – including China but excluding Japan and India – is worth more than US$400 million (S$530 million) a year, estimates professional services firm Ernst & Young (EY). If compliance work were included, that number would rise dramatically. Continue reading
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
AsianExtractor: Unearthing Accounting Fraud in Asia 