Accounting Information Is An Important Information For Decision Makers To Make Decisions.

The principle of objectivity in accounting standards requires that the accounting of enterprises should be based on pactions or events actually occurring, and truly reflect the financial condition, business results and cash flow of enterprises.

However, in recent years, the global financial community has never been calm.

In the past few years, from China's silver Guangxia, McCourt to Enron, WorldCom and other financial scandals, the global "integrity crisis" has emerged.

The China Federation of enterprises recently announced that the direct or indirect economic losses caused by the lack of credit in some Chinese enterprises amounted to 585 billion 500 million yuan, equivalent to 37% of China's annual revenue.

China's GNP is therefore reduced by about two percentage points a year.

The bankruptcy of BMS, the glinting stars of the group, all of a sudden shows the seriousness and enormous harm of accounting information distortion.

This has aroused people's deep research and Reflection on the problem of accounting information distortion.

First, the distortion of accounting information.

The so-called accounting information distortion is a phenomenon that accounting information violates the objective criteria, fails to truly reflect the objective financial situation of enterprises, business activities and cash flows and other economic activities, which has a negative impact on decision makers' relevant decisions.

Comprehensive experience in practice can distort accounting information.

(1) forgery, tampering, arbitrary alteration of vouchers and account books, and concealing of real economic pactions.

In 2002, the total assets of the company were 16 billion 282 million euros.

In this amount, the proportion of fictitious deposits made up of fictitious certificates is as high as 37.3%.

In 2001, Yinguang Xia also invented the main business revenue and huge profits by forging financial instruments, and the scope of fraud was extensive. The huge amount of money was shocking.

(two) setting up "extra account".

Privately set up "small Treasuries" enterprise funds for extracorporeal circulation; "hanging accounts", "tied up accounts", income is not accounted for, advance or postponed to settle accounts.

This phenomenon is common in enterprises. Taking the Southern Securities, a famous securities company in China as an example, so far, the central authorities concerned found that the company was suspected of misappropriating customer deposits, manipulating stock prices, illegal deposits and evasion and so on.

A large number of them are covered by "off balance sheet", and the accounts of their headquarters and branches are numerous.

(three) no prepaid expenses are extracted from the accrual basis.

It does not conform to the principle of proportioning system to confuse the cost and cost between products in different periods, so as to make profit adjustment.

(four) the provision of depreciation and reserves in accordance with the provisions, so as to regulate operating income.

In accordance with the regulations, it does not deal with the backlog and scrap assets in a timely manner. It does not cause the assets to be damaged in time when it fails to deal with the bad debts in accordance with the regulations. In the 1997~2001 years, the BMS company of the United States has prepared at least four of the profits that have been sold to the subsidiaries and production lines, with a sum of up to US $1 billion 68 million.

By the end of 2002, 78% of these huge reserves had been pferred back to cancel the selling cost and increase the rights and interests of each period.

(five) the cost and cost of indigestible business can be included in the prepaid expenses.

Long term deferred asset accounts, the long-term interest on the completed project is not included in the financial cost and is included in the cost of the project, resulting in unreal cost.

Two, comprehensive management of accounting information distortion.

With the accelerating pace of China's economic construction and joining the WTO, it has been in line with international standards.

On the one hand, more accounting information in China should go abroad. On the other hand, foreign accounting firms are also squeezed into the domestic market.

In order to remain invincible in fierce competition, accounting work must be adapted to the requirements of economic development, and the quality of accounting information should also be improved as soon as possible.

The management of accounting information distortion has become a top priority.

The following are the reasons for the distortion of accounting information. From the three aspects of corporate governance structure, social environment and legal system construction, the author puts forward several countermeasures to control accounting information distortion.

(1) countermeasures for corporate governance structure

In view of the actual situation of our enterprises and the speeches on how to deepen the reform of state-owned enterprises in the sixteen major reports, the following countermeasures are put forward.

1, clarify responsibilities and establish a modern enterprise system.

The basic characteristics of modern enterprise system are "clear property rights, clear rights and responsibilities, separation of government and enterprises, and management science".

Only when the property right is clear, can the enterprise become a real market entity. It can also carry out accounting work according to the rules of accounting conduct, and also free development space for enterprises, create a favorable external environment for the development of enterprises and promote the development of enterprises.

2, supporting incentive and restraint mechanisms.

In view of the fact that our incentive and restraint mechanisms do not match, we should manage them in two ways.

On the one hand, from the perspective of constraints, we should further implement the provisions of the "accounting law" on "the responsibility of the unit responsible for the truthfulness and integrity of the accounting directors and accounting materials", and urge the directors in charge to strengthen the internal supervision and assessment system.

Providing false information for concealing the truth will cause serious loss of state assets during the service period, and managers who are in the process of spending too much and harming the interests of shareholders should be severely punished.

And make its behavior public.

The organic combination of such assessment system and perfect manager market makes managers dare not risk losing credibility.

On the other hand, from the perspective of incentives, the performance and remuneration of business operators are linked together, and the remuneration of operators is adopted in the form of "salary + stock dividends + options", which stimulates operators to do their best for the development of enterprises.

In this way, the financial managers of enterprises will continuously improve the market value of enterprises.

So as to curb the "lazy" motivation and create a positive atmosphere of integrity.

(two) countermeasures for social environment

1., improve the accounting system and strengthen the social supervision function of CPA firms.

Intermediaries are the most important part of the accounting supervision system.

As the main intermediary agency, accounting firms play an important role in the authenticity and credibility of accounting information.

In view of the common problems existing in accounting firms, we should strengthen management, carry out a series of reform measures, vigorously develop the CPA contingent, and give full play to its fair auditing function.

In addition to strengthening the moral construction of certified public accountants, it is more important to form a relatively complete accounting management and supervision mechanism through competition.

Let the industry supervise each other to ensure the quality of the CPA industry, so as to ensure the quality of accounting information.

2., improve the supervision system and strengthen the internal and external supervision.

Accounting information users are very extensive.

It is not enough to supervise the quality of accounting information by intermediaries only.

Strong national supervision is the key link to control accounting information distortion. Effective internal supervision is also an important guarantee for the true accounting information.

Therefore, we should first strengthen national supervision and increase the density of spot checks.

The departments of finance, auditing, taxation, industry and commerce should increase communication, form resultant force, act according to law, enforce law and discipline seriously, and intensify law enforcement, so as to increase the probability of fraud and expose the fluke psychology of counterfeiters, and severely punish those responsible persons such as corrupt units and related leaders.

We should guide and standardize enterprise behavior by increasing the risk of enterprise irregularities and illegal costs.

Secondly, we should establish a good internal supervision system and ensure the quality of accounting information according to the perfect corporate governance structure.

(three) legal system

1., improve accounting policies, so that "there are laws to follow".

The ideal legal environment should be "there are laws to follow, laws must be enforced, law enforcement must be strict, and laws must be investigated".

First, we should standardize the formulation of accounting standards and strengthen the construction of accounting system.

Minimize uncertainty and minimize the washability of the unified business approach.

Secondly, according to the specific circumstances of economic development, we should amend accounting theory, amend the historical cost principle within a certain scope, and set up a "price change" accounting suitable for China's economic development.

We should purify the legal environment and make sure that we have laws.

2., strengthen the leadership and management of accounting work, and fully uphold the authority of accounting regulations.

To protect accountants' exercising their functions and powers, to protect the truthfulness and reliability of accounting information, and to strengthen the legal responsibility of unit leaders in accounting work.

Truly, "we must obey the law and enforce the law strictly."

To purify the legal environment, we will also plan to clean up the air.

3, improve the civil compensation mechanism.

At present, it has been proposed that the company should replace the accounting firms with the audit advisory business for 3 years in order to prevent the "conspiracy" of fraud caused by long-term cooperation.

Some people put forward the "accounting appointment system" to prevent the accounting information distortion caused by the lack of skills of accountants and the inability to maintain a just stand.

Some have been implemented and achieved good results.

Of course, it is not enough to guarantee the quality of accounting information only by accounting policy and civil compensation mechanism.

A mature market, governance accounting information distortion, integrity is indispensable.

It is also a positive and effective measure to strengthen the integrity building including accountants and professional ethics of managers.

Honesty can also compensate for the information distortion caused by the defects of accounting policies to a certain extent.

Self disciplined accountants are also effective ways to reduce accounting information distortion.

However, integrity is not formed overnight.

We must go through the long-term efforts of the whole society.

In short, we should pay enough attention to the distortion of accounting information, increase the quality of accounting information and even the whole industry, so as to ensure the authenticity of accounting information.

Only in this way can China's accounting work get on the right track and serve the socialist market economy better.

Only in this way can the order of social economic construction be standardized.

Author: Shanxi Datong gear Refco Group Ltd accountant