Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 209

Full Length Research Paper

Corporate governance of IPO enterprises with financial accounting fraud in China’s growth enterprise market-A case study of ABC Group

Philip Law
  • Philip Law
  • Department of Accounting and Information Management, Room 3067, Faculty of Business Administration, E22, Avenida da Universidade, Taipa, University of Macau, Macau, China.
  • Google Scholar
Ma Jingyi
  • Ma Jingyi
  • KPMG, Beijing, China.
  • Google Scholar


  •  Received: 19 October 2021
  •  Accepted: 19 January 2022
  •  Published: 28 February 2022

Abstract

This study focuses on analysing financial ratios to identify the company’s (ABC Group) problems and the means by which financial fraud was committed. It proposes recommendations and solutions for the corporate governance of IPO enterprises in China’s Growth Enterprise Market. This study finds that imperfect corporate governance led to financial fraud being committed by ABC Group. Many other IPO enterprises in the Growth Enterprise Market suffer from the same corporate governance flaws as ABC Group, including an over-concentrated ownership structure, ineffective board of directors and supervisors, lack of management morality and other internal governance issues, external governance issues such as imperfect capital market system, insufficient supervision, and lack of independence of intermediary agencies. Results indicate that enterprises should optimize their equity structure, improve the relevant mechanisms of the board of directors and supervisors, and increase the moral constraints on management.

 

Key words: Corporate governance, financial fraud, auditor independence, accounting.