Yinguangxia ("YGX"), stock listed company in China, captured the attention of the media, from the mid-1990s, for her contribution to the eco-agricultural industrialization of China and the modernization of traditional Chinese medicine. The astonishing leap stock prices, about 440% in 2000, summoned journalists to Caijing, a local reputable financial magazine to be suspicious, and they went to investigate YGX. August 2, 2001, Caijin published an article alleging misrepresentation YGX in export business, which involved selling its subsidiary Tianjin biologically produced products in the German company, Fidelity Trading GmbH. Overstatement of earnings of U.S. $ 93 million in the period from 1998 to 2001 was eventually identified the China Securities Regulatory Commission, and four senior officers of the company, including former CEO and CFO and Tianjin YGX Guangxia, were sent in prison for forgery and misrepresentation of information. The license to operate the external auditors of the company, Zhongtianqin, was canceled, and professional certificates from two certified accountants were canceled. The scandal has also led to investors' crusade pursuit of private compensation from the loss of their investment, legal protection of private shareholders in China is still a major concern in the country. Being a top performer in the Chinese stock market, loss YGX to identify weaknesses in the system of corporate governance in China . It also sheds light on the problems of auditing practices in China. "Hide
by Amy Lau, Claudia HL Woo Source: University of Hong Kong, 23 pages. Publication Date: November 5, 2007. Prod. #: HKU687-PDF-ENG
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