Research On The Formation Of Financial Risk And Audit Supervision In Securities Companies

In recent years, the existence of black holes and huge losses in securities companies has repeatedly been exposed, shocked the management and the vast number of investors.

These scandals not only dealt a heavy blow to the confidence that the market already lacked, but also pushed the stock index down continuously, and plunged the securities companies into a business crisis which faced serious losses and huge amounts of funds could not be repaid, which seriously affected the sustained, healthy and stable development of the securities market.

This article introduces the auditors' comprehensive audit of a securities company, so that we can have a clearer understanding of the essence of the illegal financial management business of securities companies and the resulting financial risks, business risks and even social harmfulness.

On this basis, the audit methods and skills used by the auditors in the actual audit work are briefly summarized.

A securities company entrusts financial guarantee to guarantee interest and interest, and the parties are essentially loan relationships. It is a disguised financing means taken by securities companies to expand their proprietary securities business. It is entrusted by the investment management business. It refers to the securities companies acting as trustee investment managers (hereinafter referred to as trustees), signing investment trustee management contracts with clients based on relevant laws, regulations and investment intentions of the investment trustees (hereinafter referred to as "principals"), and investing the assets entrusted by the trustees in the stock market, such as stocks, bonds and other financial instruments, so as to achieve the optimal behavior of the entrusted assets.

The securities company only acts as an agent in the entrusted investment management business, and receives commission fees and dividends on investment income.

However, in fact, when a securities company signs a contract of entrustment with a trustor, there are provisions in the contract or supplemental contract, which promise that the principal and interest shall be returned to the principal in accordance with the cost of the bank loan interest rate which is much higher than that of the same period. All securities investment risks shall be borne by the securities company, and the client is only a pure creditor.

In October 18, 2000, A Group signed an asset management contract with B securities company. The content of the contract is in full compliance with the relevant regulations formulated by the securities regulatory authorities. However, on the basis of the signing of the supplemental agreement, the two sides stipulated that the securities company guaranteed the annual yield of the entrusted assets of the group company to be 7.822%.2000 October 13th and 18. The Sales Department of B securities company received the 20 million yuan consigned funds pferred by the A group company. In November 2nd, B securities company returned 1 million 564 thousand and 400 yuan to the group company in the name of the prepaid income, its real interest rate was much higher than the bank loan interest rate of the same period.

Therefore, auditors believe that the relationship between securities companies and clients is actually a loan relationship between funds. This kind of widely commissioned financial management business is essentially a means for securities companies to expand their proprietary businesses for financing purposes.

In a practical case of auditing a securities company, more than 99% of the clients entrusted to manage financial pactions are those who collect interest on time instead of the real client.

Two, in the absence of strict internal control and external supervision environment, securities companies in the form of entrust financial management in essence, self financing business operation there are many forms of violation.

When using financial capital to make self investment, securities companies who bear huge financial risks often use the advantage of capital to centrally manage the financial funds of different entrusted accounts for buying and selling the same stock and obtain high illegal profits by manipulating the price of securities paction, and abandon the operating principles of independent clients operating financial assets.

Since May 2001, B securities company has continued to use a large number of entrusted financial accounts to buy and sell or hold a certain stock. As of December 2003, the actual position has reached the 46.05%. of the stock exchange. This is a typical case that B securities company manipulated the stock market by means of entrusted financing business, and became a stock market maker for illegal profits.

(two) commissioned by the financial management business with self operation, operation lacks independence.

Although the securities company has established an independent trusteeship investment management department, its entrusted investment management business is not strictly separated from its proprietary business, independent decision making and independent operation. It is influenced by the company's proprietary business. It uses the entrusted financial management business to set up the investment account in the name of the client, uses a decentralized entrusted financial account to buy and sell a large stock on a large scale, divides the warehouse to cooperate with its own business, and even assists the company to manipulate the stock.

(three) under the guise of providing the guarantee to the bank loan, the bank takes the bank funds to entrust the financial management business, resulting in the indirect flow of bank funds into the stock market.

In accordance with the regulations, securities companies should understand the trustworthiness, income expectations, risk tolerance and investment preferences of the trustor, and pay attention to the legitimacy of the source of the principal's funds.

However, in order to expand the financing channels, some securities companies defrauded bank credit funds by undertaking the "entrusted financial management" business by providing customers with bank loans, and then provided the counter guarantee for their own guarantee activities with the "entrusted financial management" funds (actually the bank credit funds) invested by customers.

B securities company has signed the asset management contract with A group and signed the supplementary agreement on the basis of it. The agreement stipulates that B securities company will provide guarantee for the bank credit loan of A group company. A group will open a securities trading account in B securities company, and take the stock and funds in the account as the counter guarantee for the B securities company to guarantee the bank loan.

The entrusted financial management fund is essentially the credit fund provided by the bank, which violates the relevant provisions that the bank credit funds must not engage in securities investment.

(four) using a variety of violations to make up for the loss of entrusted financial management.

In order to attract clients to entrust financial management, the company will violate the promise of capital preservation and interest payment. However, if there are serious losses, lack of Liquidity Fund and unable to repay the principal and interest at maturity, the securities company may take various illegal measures to make up for the shortfall in the entrusted financial management.

If it violated the principal interest of the clients, signed a new "entrustment financial" contract without real capital sources, or appropriated the financial funds of the unexpired customers to make up the principal and interest of the expired customers through the way of breaking up the east wall to make up for the west wall, or was forced to absorb the new "entrusted financial management" funds to make up for the shortfall of the capital and even take the risk. In the form of "empty standard coupon", it appropriated the treasurable treasury bonds to finance the repurchase to acquire customer funds, or used the customer's margin of the business department as collateral to defraud the bank credit funds.

Three, violation of entrusted financial management is a great hazard to the development of capital market. Entrusted financial management business is only a common business of securities companies. If compliance operation, risks should be within a controllable range, and will not cause such a great impact and harm to the market and the parties involved.

However, due to the incompletion of the corresponding system and regulations, and the lack of laws and regulations of relevant personnel, the risk has been rapidly enlarged, and the crisis of securities dealers has erupted.

In order to attract more customers' capital, the securities company can promise more customers' capital to repay the principal and pay fixed income in the contract or supplementary contracts. However, such contracts will inevitably bring large business risks and additional debt repayment burden, forcing the securities companies to take high-risk investment behavior to obtain high profits.

Therefore, it is very likely that securities companies will centralize the sale of funds from different entrusted accounts to the same stock or cooperate with the company's proprietary business to buy and sell certain stocks, manipulate the stock price in order to obtain illegal profits, entrust financial services to lose their independence, concentrate risks and increase continuously, and at the same time, manipulated stock prices simply can not reflect the intrinsic value of stocks, and the market mechanism can not play an effective role and the market order is destroyed.

When a securities company suffers from serious losses, short of liquidity and unable to pay the principal and interest of the expired customer, the securities company is likely to take advantage of the illegal means of misappropriating the customer's margin, misappropriating other clients' entrusted financial funds, or defrauding bank funds in the form of guarantee, so as to make up for the shortfall in the financing entrusted by the Commission, and the related risks are correspondingly pmitted to other investors and banks.

When investing in financial capital, when the stock market falls for a long time or fails to invest, the broker will fall into a continuous loss and keep the vicious circle of financing. The hole of entrusted finance will become bigger and bigger as snowballs. If the capital chain breaks, the stock will sell at any cost, causing the share price to drop sharply, the stock market will be shakedown, and the banks and related investors will also suffer serious losses, and the normal operation of the stock market will be severely damaged.

Four, auditors should make full use of the characteristics of illegal entrusted financial management, grasp the clues, and figure out the way of thinking. In order to discover and expose the huge risk that a securities company may have, auditors through continuous exploration and research, extract some characteristics of securities companies' illegal commission money and clues for auditors to make use of, and design an audit model of entrusted financial business of securities companies, and use them in specific audit projects.

(1) before the capital account was sold, there was a pfer of funds and make up for losses.

If the financial account operation fails and fails to achieve a predetermined profit level, the securities company will pfer the compensation fund into the capital account, and the account balance after adding compensation funds should be slightly larger than the original investment principal.

There are several sources of fund to make up for the loss of customers: first, the use of their own funds to make up for losses. The original source of funds is generally a certain securities company. The two is to divert funds from other unexpired clients in the accounts, to make up for the west wall, to allocate large amounts of funds between the capital accounts of different owners' names, and the three is to use the extra funds to make up for the loss of clients.

In either case, the source of funds is different from the original investment capital that was first pferred.

Auditors should pay close attention to the capital account pferred to the capital account before the pfer of the capital empty account, and the source of the pferred funds is not the same as the source of the initial capital of the investment account and the whereabouts of the final pfer funds.

(two) the duration of capital account is fixed.

The entrusted financial contracts between securities companies and investors are fixed for a period of three months, half a year or a year, while normal brokerage investors usually have no fixed investment period.

The auditor should pay attention to the capital account of the initial capital pfer and the final pfer of funds at an interval of exactly three months, and the investment account is marked as a general brokerage account.

(three) the amount of funds in the capital account is a large integer.

In order to facilitate the calculation of commission and interest, securities companies and investors usually sign large fixed amounts of financial contracts, specifically reflecting the pfer of large account funds to new accounts, or the total amount of capital invested by investors in the original capital account.

In the same capital account, the investment capital will not be increased halfway during the period of commission, or the capital will be reduced by pferring funds or stocks.

Auditors should pay attention to the large amount of capital pferred into the initial account. During the whole investment period, there is no capital account or stock pfer to the capital account.

(four) capital account is jointly managed, reserved for clients and securities companies.

In order to prevent the unnegotiated pfer of funds and the pfer of shares to the custody and designated trading activities, both the securities companies and customers must jointly advance the indemstor of the funds account, and implement joint consignment.

Under normal circumstances, most individual investors operate by passwords rather than using seals.

The auditor should pay attention to the capital account of the investor's personal seal and the seal of the securities company (or the employee's personal seal of the securities company) in advance, and the investment account is marked as a general brokerage account.

(five) the trading behavior of entrusted financial pactions accounts, the type and proportion of stocks held in stocks are very similar.

In order to gain high profits, the company will be able to manage a large number of capital accounts under its management. It will be centralized by a unified policymaker and trader to carry out high risk investment. The pactions between different trading accounts controlled by the same entity and the variety and proportion of the stocks will inevitably become very similar.

Auditors should be concerned about trading behavior, stock type and proportion, but the owner's name is not.