Posted by Katharine TAN Pei Shi, Year 4 undergrad at the School of Accountancy, Singapore Management University
Shares in Chinese e-commerce company Alibaba crashed on Thursday as the company reported a slide in revenue growth and fended off accusations of trading in fake goods.
Alibaba suffered a 10% drop in its share price in early trading after announcing a 40% increase in revenues in the final quarter of 2014. The total, $4.22bn, missed analysts’ forecasts of $4.45bn. Continue reading
The Price of Oil Is About to Blow a Hole in Corporate Accounting
8:00 AM AWST
March 4, 2015
(Bloomberg) — There’s one place in the world where oil is still $95 a barrel.
On paper.
The U.S. Securities and Exchange Commission requires drillers to calculate the value of their oil reserves every year using average prices from the first trading days in each of the previous 12 months. Because oil didn’t start its freefall to about $45 till after the OPEC meeting in late November, companies in their latest regulatory filings used $95 a barrel to figure out how much oil they could profitably produce and what it’s worth. Of the 12 days that went into the fourth-quarter average, crude was above $90 a barrel on 10 of them. Continue reading
http://blogs.wsj.com/cfo/2015/03/03/almost-half-of-global-audits-have-problems/
March 3, 2015, 5:08 PM ET
Almost Half of Global Audits Have Problems
Senior Editor
Nearly half of global audits inspected last year were deficient in some way, an international accounting consortium said Tuesday. Top concerns included internal controls testing, measuring fair value of assets, and revenue recognition, according to the International Forum of Independent Audit Regulators. The organization examined almost 950 reports from 29 countries. Internal controls and revenue recognition are two issues getting a closer eye from companies and their auditors, as well as accounting and securities regulators these days. Continue reading
http://www.reuters.com/article/2015/03/02/siemens-china-healthcare-idUSL5N0W42IN20150302
Siemens investigates report of fictitious Chinese contracts
Mon, Mar 2 2015
FRANKFURT/SHANGHAI, March 2 (Reuters) – Germany’s Siemens said it was investigating a media report that it boosted sales figures of its healthcare equipment in China by creating fake contracts. Chinese business daily Yicai cited Chinese distributors as saying that Siemens’ healthcare division had been creating contracts with them that were not backed up by real sales. The distributors would pay a 10 percent down payment, allowing Siemens to book the contracts. Siemens would then return the payments to them by other means, Yicai said. Continue reading
Hedge Funds Cry Foul Over Indonesian Debt Workout
March 3, 2015
(Bloomberg) — Five hedge funds are testing Indonesia’s legal protections for foreign investors after a local court barred them from PT Bakrie Telecom’s debt restructuring talks.
The funds and one other bondholder are asking a New York court to quash a ruling by a Jakarta district judge that they can’t vote on the workout arrangements because their defaulted notes were issued by an offshore special-purpose vehicle. The investors, who own 28 percent of the $380 million May 2015 dollar-denominated securities, said in the suit they will recover less than 20 cents on the dollar under the plan. Continue reading
http://www.reuters.com/article/2015/03/03/us-china-audit-idUSKBN0LZ09N20150303
Posted by Joel CHUA Yong Sheng, Year 3 undergrad at the School of Business, Singapore Management University
China state-owned firms’ overseas assets are not audited: Xinhua
Mon, Mar 2 2015
SHANGHAI, Mar 3 (Reuters) – China does not audit the 4 trillion yuan ($637.42 billion) of assets its state-owned enterprises (SOE) hold overseas, Xinhua news agency reported, highlighting difficulties the government faces when expanding its anti-corruption drive to SOEs. Continue reading
Building trust as a tool to create an anti-fraud environment?
Posted by PHOON Pei Jing, Year 3 undergrad at the School of Economics, Singapore Management University
http://www.huffingtonpost.com/cynthia-hanson/how-can-businesses-build-_b_6537670.html
http://www.businessinsider.in/Corporate-Frauds-In-India-On-The-Rise/articleshow/45899708.cms
http://www.reuters.com/article/2012/07/30/us-financial-sarbox-idUSBRE86Q1BY20120730
Given the rising number of fraud cases around Asia, with India seeing a rise of over 45% in corporate frauds in the last 2 years, one of the more important questions today in the business world has been about how businesses can build trust. After all, trust is key to any businesses’ performance as well as competitiveness, and building trust may even help lay the foundation to a successful anti-fraud business relationship. Continue reading
Detecting the rapidly rising number of small scale fraud cases
Posted by PHOON Pei Jing, Year 3 undergrad at the School of Economics, Singapore Management University
With the enforcement of the Sarbanes-Oxley Act, standards at big companies have generally improved over the past decade or so, with more effective internal controls over their financial reporting. In addition, “Accounting Quality Model”, a computer program that number-crunches reams of companies’ financial statements looking for outliers and other red flags to facilitate fraud detection have also been extensively revised. Stringent enforcement, together with streamlined process of fraud detection has helped to create an anti-fraud environment. Continue reading
Posted by Mildred LIANG Bei Yan, Year 4 undergrad at the School of Accountancy, Singapore Management University
Where Should SEC Start A Fraud Crack Down? Maybe Look At Fake Restatements
It’s so good to hear that the Securities and Exchange Commission plans to refocus its enforcement efforts on accounting fraud. It would be even better for investors if the regulator used all the information already available – no need to resort to fancy computer algorithms – to prosecute accounting frauds and the executives, directors and third-party aiders and abettors like lawyers and auditors. Let’s stop waiting to be roused to action by private lawsuits. Continue reading
Posted by Jelvin Tan Xiang Rong, Year 4 undergrad at the School of Accountancy, Singapore Management University
By Fan Yu, Epoch Times | March 2, 2015
Five years ago, Sino-Forest Corp. was one of the largest commercial forestry companies in China and a stock-market darling, attracting capital from legendary hedge fund investors such as John Paulson.
Sino-Forest owned and operated tree plantations throughout China, and manufactured and sold wood products to downstream customers. The company floated shares onto the Toronto Stock Exchange. Its stock soared as investors rushed to participate in a supposedly booming Chinese economy. At one time, Sino-Forest’s market capitalization eclipsed $6 billion.
Then it all came crashing down. Continue reading
AsianExtractor: Unearthing Accounting Fraud in Asia 