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Financial Management

Published: April 2011

This issue of China Briefing is devoted to sound financial management. How to cover such a broad topic in a mere 11 pages? We start with a cover story on the hottest related issue in recent months - financial fraud in the U.S. IPOs of Chinese companies.

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  • No. of Pages: 12 pages

In this issue:

  • Financial Fraud in the U.S. IPOs of Chinese Companies
  • Better Financial Due Diligence
  • PRC GAAP, Fapiao and Sound Financial Management
  • Common Inaccuracies in Chinese Balance Sheets
  • The China Tax Guide: New Updates

This issue of China Briefing is devoted to sound financial management. How to cover such a broad topic in a mere 11 pages? We start with a cover story on the hottest related issue in recent months - financial fraud in the U.S. IPOs of Chinese companies. This article is written by a recent addition to the Dezan Shira & Associates team: Richard Cant, Director of Corporate Accounting Services. An energetic Australian, Richard helps to walk readers through the legal and sometimes legitimate, but recently severely misused process of reverse mergers, through which over 350 Chinese companies have already gone. This process allows companies to establish private “empty shell” companies in the U.S. and register on U.S. stock exchanges, skipping directly to major boards such as NASDAQ or NYSE because of technical loopholes. The fraud hidden by this financial technique has been widely exposed in various media sources in recent weeks and fit nicely in with this month’s theme of financial management.

The solution to protecting investors in Chinese companies? Due diligence, due diligence, due diligence. We provide our insights into this and into two very China-specific financial management topics: PRC GAAP accounting standards and fapiao. Finally, after demonstrating how much of the mystery of Chinese accounting books is directly related to tax avoidance, we bring in some regulatory perspective by summarizing updates made by the accounting and legal professionals at Dezan Shira & Associates to The China Tax Guide.

 

Financial Management | Asia Briefing
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