Research on CREC IPO Dispute, and its Enlightenment on Chinese Accounting Standards Reform
On December 3rd, 2007, China Railway Group Limited went listed on A-share market in Shanghai Stock Exchange. The issue price was 4.8 Yuan per share. In this IPO, the capital frozen was a record high 3.38 trillion RMB.However, as CREC went on listed, there started a great dispute among some investors and analysts, and the focus of the dispute was whether the net profit demonstrated by the financial reports of CREC is true and fair. The problem is that CREC adopted the new China Accounting Standards issued just in 2006 for the first time. On book there was a net profit of 1.54 billion RMB during the first 6 months of 2007, of which 226 million came from investment income; CREC also wrote off 1.17 billion of welfare payable during this period according to the new accounting standard. Whats more, in the first half of the year, the cash flow of CREC was negative, and the operating income declined compared to the last year.The paper will give a detailed research on the debate of CREC financial reports as well as Chinas new accounting standards. The followed questions will be answered in this paper:1. Is the net profit demonstrated by CREC true and fair? Did CREC abuse the new accounting standards?2. Is the relevant accounting standard reasonable? Is there any problem in the process of setting accounting standards?3. To what extents can accounting manipulation affects the IPO process? What can we do to regulate these manipulations in the future?4. How to ensure more protection on individual investors?
CREC Chinas New Accounting Standard Employee Welfare Ezpenses
Xiaoyan Huang Chen Cheng
School of International Business, Beijing Foreign Studies University, Beijing, 100089, China
国际会议
The 7th Northeast Asia Management & Economy Joint Conference(第七届东北亚经济与管理论坛)
北京
英文
211-227
2008-10-25（万方平台首次上网日期，不代表论文的发表时间）