Tax fraud is also a component of statement fraud, and its risks are as wide-ranging and harmful as accounting statement fraud. How many bosses are racking their brains to reduce their tax burden and pay less tax, and accountants are also trying every possible means to show off their "talents" in "tax planning". However, we must realize that the tax risks are extraordinary. There are many people who have been fined for tax evasion and tax evasion. Companies have been fined and closed down, sentenced to jail time, and their families have been ruined.

A list of corporate financial fraud methods

Fraud has been around since ancient times, but since the 21st century, the impact of fraud on companies has been similar to the bombing of the World Trade Center on September 11. Some top companies no longer exist, their executives have been sentenced or indicted, millions of investors have lost hundreds of billions of capital, and cases of corporate fraud continue to emerge. Enron, WorldCom, Tyco, Xerox... appeared abroad, but what about China? Lantian, Yinguangxia, Kelon, Sanlu, etc. also did not show weakness. Fraud threatens the survival and development of enterprises and even social stability.

1. Fraud and corporate fraud

Discover its essence. Fraud is synonymous with theft, deception, lying, forgery and lack of integrity. It seems true on the surface. Uncover the surface. Later the fraud, corruption and lies were all exposed. Fraud risk refers to the damage that may occur due to low vigilance against fraud and inadequate preventive measures. Fraud risks are always present and everywhere, and they are likely to get worse. There are corrupt officials at the top and fraud at the bottom. The tricks are constantly being reinvented and fraud is being carried out. It is really impossible to guard against it. It has become a major hazard to people's survival and a major hidden danger in building a harmonious society. We must work together, strictly prevent and punish, and restore peace to society.

"Corporate fraud" as defined by the U.S. Department of Justice contains the following legal provisions:

(1) The company falsifies financial information. Including falsifying accounting entries, providing false transactions, artificially creating income fluctuations, fraudulently overestimating assets, profits and gains, or underestimating/hiding liabilities and losses, and transactions that evade legal supervision;

(2 ) Discretionary trading by company insiders. Including insider trading, kickbacks, improper use of company assets for personal gain, and any self-trading behavior that violates relevant personal income tax laws;

(3) Funds and funds operating illegally Hedge fund-related fraud. Including delayed transactions, certain market timing, false net asset values ??and other fraud and fraud involving mutual fund or hedge fund trading practices;

(4) Obstructing notarization, doing Perjury, tampering with evidence, or other acts related to (1) to (3) above.

2. Various manifestations of corporate financial fraud

Among corporate frauds, financial fraud is the representative one. According to the perpetrators of fraud, there are senior management fraud, accounting fraud, employee fraud, Non-employee fraud, etc.

(1) Senior management fraud

There are many types of senior management fraud. As far as a company is concerned, the focus is financial reporting fraud, tax fraud and product fraud.

1. Financial report fraud

Financial report fraud is fatal to an enterprise, and in severe cases, it will seriously affect society. Well-known companies such as Enron, Xerox, WorldCom, and Arthur Andersen all went bankrupt due to falsified financial reports, resulting in hundreds of thousands of employees losing their jobs, tens of millions of shareholders suffering losses, and even severe damage to the capital market. President Bush was also anxious to Come to "rescue".

(1) Financial reporting fraud tactics. From abroad, financial reporting frauds are endless and are becoming more and more common. Starting from Enron in the United States, there have been successive accounting fraud cases involving large companies such as Xerox and WorldCom. In 2007, it was discovered that Japanese electrical appliance giant Sanyo Electric deliberately reduced the subsidiary's loss of 190 billion yen to 50 billion yen in its annual financial report ending in March 2004, and also concealed a large amount of losses for future write-offs. , called Japan’s “Enron Incident” by the media. The Dubai debt crisis recently exposed potential financial reporting fraud.

From a domestic perspective, financial reporting fraud has also been widespread in recent years. Taking listed companies as an example: Yuanye Company inflated sales revenue, concealed management expenses, and speculated on the company's stocks. Profit 222 million yuan. From 1989 to 1991, the external statements showed a cumulative profit of 77.425 million yuan, but the actual cumulative loss was 144.575 million yuan. Falsely reported profits of 222 million yuan.

·Qiong Minyuan fabricated 566 million yuan in profits and 657 million yuan in capital reserve in 1996 by recognizing nearly 200 million yuan in capital investment and cooperative housing construction funds as income.

·Dongfang Boiler adjusted its financial report before going public to inflate its net profit by 123 million yuan. After listing, the revenue of 176 million yuan and profit of 38 million yuan in 1996 were transferred to 1997.

·Shenyang Liming Shares has even more tricks. In 1999, it used methods such as issuing value-added tax invoices, falsely issuing product sales invoices, using preferential policies for export goods, and arbitrarily expanding the scope of sales business to falsely increase its assets by 89.96 million yuan. , inflated liabilities of 19.56 million yuan, inflated owners' equity of 70.4 million yuan, inflated main business income of 150 million yuan (accounting for 37% of revenue), inflated profits of 86.79 million yuan (accounting for 166% of actual profits), and the total profit was It was verified that the loss changed from RMB 52.31 million disclosed to the public to RMB 34.48 million.

·Jinan Qingqi Motorcycle Co., Ltd. was listed on the market in order to maintain its license. In 2002, it used the "big bath" method to make 2.7 billion yuan in bad debt provisions for some long-term unrecoverable accounts, and also provided guarantees for the loans of related companies. A provision for bad debts of 1.3 billion yuan was made, which significantly reduced profits for the year. By 2003, the bad debt provisions accrued in the previous year were transferred back to 1.58 billion yuan, turning losses into profits in one fell swoop, realizing the "brand protection" conspiracy. The use of false accounts and invoices to evade state taxes can be seen everywhere.

(2) Factors of financial reporting fraud Michael Young pointed out in "Accounting Irregularities and Financial Fraud" that financial reporting fraud is common in the real world. There is an insatiable greed for financial information. It also pointed out six factors of financial reporting fraud: ① The motivation for fraud stems from dishonesty; ② The motivation for fraud stems from pressure; ③ Fraud starts from small things; ④ Fraud starts from the gray area of ??accounting; ⑤ Fraud increases over time; ⑥It is difficult to get off the tiger and cannot be corrected.

Once a fraudulent incident involving falsified reports is exposed, it will cause stock prices to drop, lawsuits to continue, reputation damage, criminal prosecutions, accountants to be caught, and tens of thousands of investors to lose their money.

2. Tax fraud

Tax fraud is also a component of statement fraud, and its risks are as wide-ranging and harmful as accounting statement fraud. How many bosses are racking their brains to reduce their tax burden and pay less, and accountants are also trying every possible means to show off their "talents" in "tax planning." However, we must realize that tax risks are extraordinary. There are many people who have been fined for tax evasion and tax evasion, and their companies have been fined and closed down, sentenced to jail, and their families have been ruined.

3. Product/service fraud

In addition to financial reporting fraud, corporate fraud also includes product fraud. Through the annual "3.15" party, it can be seen that the losses it causes to society cannot be underestimated. The infant milk powder produced by Shijiazhuang Sanlu Group has harmed hundreds of thousands of children because it contains melamine. Some have caused kidney failure, some have developed renal insufficiency and have suffered lifelong damage, and some have caused death. Its boss had known for a long time that it contained poison, and some employees had long persuaded their friends not to use Sanlu milk powder. However, the factory still sold it in a fraudulent manner, and only stopped production after being exposed in large numbers. In the end, the company went bankrupt, the boss was jailed, employees suffered, and more than 300,000 children were harmed.

(2) Accounting fraud

The basis of financial reporting fraud is accounting fraud. Levitt pointed out that there are five accounting "tricks": huge write-offs of restructuring expenses, creative acquisition accounting, Dessert box preparation, abuse of accounting immateriality principle, early recognition of revenue. Specifically, there are various methods as follows:

·Fabricated income. Create revenue out of thin air by falsely issuing invoices and overestimating the degree of completion;

·Recognize revenue in advance.

Recognize undue revenue or revenue that cannot be realized in advance;

·Exaggerate one-time revenue. Overestimating the value of assets through asset transfers and inflating corporate income;

·Inflating inventory. Claiming other people's assets as your own, or making up fictitious goods/materials out of thin air;

·Adjusting asset values. Use impairment provisions, bad debt provisions, etc. to adjust asset values;

·Use time differences. Record the income/expenses that should be included in the next year into the current year; or conversely, record the income/expenses that should be included in the current year into the next year;

·Do not recognize non-performing assets. Keep the payment for goods and scrap products that are impossible to recover on the books;

·Change the nature of expenses. Convert capital expenditures into expense expenditures, or convert expense expenditures into capital expenditures;

·Transfer funds. Convert the company's funds to other uses;

·Falsely list expenses. Use fictitious company invoices to pay large amounts of costs;

·Conceal liabilities. Corporate debts and contingent liabilities will not be reflected in financial reports.

·Business merger. Whether to adopt the "purchase method" or the "equity method" will produce different value results.

·Consolidated reports. By adjusting the scope of consolidation to change the "face" of the statements, Enron's main accounting issue is whether SPE should be consolidated;

·Accounting estimates. Abusing accounting estimates to adjust asset depreciation methods and years;

·Accounting measurement. Arbitrarily change the accounting measurement method to adjust the current profit and loss of the enterprise;

·Intangible assets. Some companies have a high proportion of intangible assets and use the pricing and amortization period to adjust profits;

·Related transactions. Using the guise of the market to transfer corporate profits or expenses and change financial reports;...

The main characteristics of these methods are the abuse of accounting options, the exploitation of loopholes in accounting standards, and the use of form over substance. Accounting "intelligence" is crucial here. He can turn money-losing companies into "profit-making" statements; profitable companies can also turn into "loss-making" statements. Just like a joke circulating in the society: The company boss interviews the accountant candidates. The question is "1 1 =?", and the first accountant applicant's answer is "2". Asked the second accountant, he thought: The accountant must create more wealth for the boss before he will hire you. After thinking about it, the answer was "3". When the third accountant applied, he walked over and whispered into the boss's ear: "How many did you say? That's how much." The boss was overjoyed when he heard this: Okay! I'll hire you. Although this is a joke, it has become a reality. Qin Xiao, chairman of China Merchants Group, publicly declared to Deputy Director of the State-owned Assets Supervision and Administration Commission Li Yizhong and the guests at the scene: "I was in Beijing for a meeting these two days. The leaders of the company called me and asked me whether the profit this year would be 1.7 billion, 1.8 billion, or... How about 2 billion? I said you wait until I go back and look at the SASAC's assessment regulations before I decide. "Isn't this "the boss's profit and the factory director's cost?" These people turn the science of accounting into magic and change accounting data at will. But it should be noted that the more data is altered, the greater the potential risks and the greater the suffering in the end.

(3) Employee Fraud

There are also a lot of frauds committed by employees within the company. According to a 2004 report from the Association of Certified Fraud Investigators, 92% of fraud involves misappropriation of corporate assets, theft of cash, underreporting of income, and false expenditures. Among them, cash assets account for about 80%. Among the fraud methods and methods, the most frequently used method is the misappropriation of assets, which can be summarized into the following items: · Internal and external cooperation. Staff in various departments of the company, as well as relevant personnel within and outside the company, use their respective "convenient" conditions to avoid the company's internal control and supervision, cheat together, and jointly steal company assets to achieve the purpose of embezzlement.

·Crossing Chencang secretly. Pretend to be plotting to deceive others, and use roundabout and changing methods to steal corporate assets.

·Fish in troubled waters. The act of obtaining unfair benefits by taking advantage of some unexpected or chaotic situation.

·False claims. Knowingly violating the current rules and regulations, they resorted to deceitful means, falsely reported expenses, obtained funds, falsely obtained materials, and seized them as their own.

·Create something out of nothing.

They fabricated fake collection and payment items out of thin air, purchased illegal fake invoices, fabricated fake salary slips, fake contracts, altered fake sales returns, etc. to commit cheating and corruption.

·Be proud of yourself. Deliberately confusing account correspondence and mishandling economic transactions. For example, the interest paid by an enterprise is originally a loan for operating purposes, but is included in capital expenditures in order to increase profits for the year.

·Watching and stealing. Taking advantage of his position as a property manager to engage in corruption and theft. If there is a warehouse keeper, find some scrapped instruments, exchange them for good instruments in the warehouse, and sell them out.

· Embezzlement without repayment. The company's income is taken into account by under-counting the selling price, not issuing or under-issuing invoices, and not recording the payment received, so as to directly take the income as its own.

·Fake public benefit for private gain. Seeking personal interests in the name or power of the enterprise. For example, when purchasing supplies for a company, go to classmates and friends to purchase at high prices and get the kickback yourself.

·Hidden the truth. Hiding the truth of fraud matters in daily economic and business activities makes it difficult for people to suspect or discover, and even mispayments may occur, in order to achieve the purpose of corruption.

·Imitate signatures. Imitate the signatures of relevant leaders of the company to make non-compliant documents pass through customs, or go to the warehouse to falsely claim materials. To achieve the purpose of stealing corporate property.

·Yin and Yang bills. Fill in different numbers on the main page and side page of the invoice and document. To achieve the purpose of concealing income, expanding expenditures, and receiving more materials for corruption.

(4) Non-employee fraud

Although the risk of non-employee fraud occurs outside the enterprise, it also seriously harms the survival and development of the enterprise. Its fraud tactics mainly include the following: Ponzi scheme It is a conspiracy planned by Italian speculator Charles Ponzi in the 20th century to deceive people into investing in a company that is actually fictitious. He promised investors that they would receive generous returns in the short term. The investment returns lured many Bostonians into investing money in his "too good to be true" investments. Pay a 50% return on fraudulent money. Soon the influence spread rapidly, and those investors who had already received a rate of return invested their funds in the scam again. Soon, Ponzi was able to absorb millions of dollars in funds every day. Eventually, he absorbed more than 20 million US dollars. Among them, US$15 million was used to repay interest, and the remaining more than US$5 million was used for his and his wife's personal consumption. After the scam was discovered, the court sentenced Ponzi to ten years in prison. He died penniless in Brazil in 1949. Now we call the scam that uses the funds of subsequent investors as a return on the initial investment a "Ponzi scheme." Unfortunately, people didn’t learn from this and the scam is still common today.

·Pyramid scam. It is like today's MLM. If members want to get the most profit, they do not rely on selling products, but on recruiting new "salespeople". This scam is commonly used to promote household products and services. If you want to join this kind of organization, you usually have to pay some fees in advance, and the collected funds are paid to members who joined earlier. But in fact, no one is actually engaged in selling products, but is constantly recruiting new members and using the funds paid by new members to maintain the entire pyramid. In the end, if there are not enough people to join this scam, it will inevitably end in failure. This kind of scam is extremely harmful to society and must be strictly guarded against.

·"Phishing" scam. It refers to a scam carried out by a certain actor who has established a model of "immediate repayment of small orders". After a few safe trades with small orders, the victim lost his skepticism. At this time, the behavioral entity places large orders. After the goods are shipped, the customer (i.e. the actor) stops paying and runs away. The scam can also be designed in reverse. The actor acts as a supplier. He first provides high-quality and low-priced products, but requires payment first before picking up the goods. After several small transactions, the buyer mistakenly believes that the supplier (actor) is an honest, reliable and legal person. Once a large order is placed, the supplier will abscond with the money.

·Payment scam. It claims that you "won XX prizes" out of thin air, or claims to help you transfer a large sum of money out of the country. But to get the prize or bonus, you need to send thousands of dollars in personal taxes or handling fees.

However, victims who send money will certainly not receive any prizes in the end.

·Credit card fraud.

(1) Card theft. He stole the card from the cardholder, or copied or stole the password, and took the money away before the cardholder reported the loss.

(2) Credit card identity fraud. The credit card is still held, but its information has been obtained through various means and used by an imposter to order goods online, all that is required is the card number and expiration date.

(3) False return scam. Customers are "gods" to a company. When customers are not satisfied with the company's goods or services, they will ask for returns. In the absence of merchandise sales returns, dishonest employees can fake refunds in the system and charge the money to their own credit cards. Therefore, credit card chargebacks need to be reviewed and analyzed regularly.