Too good to be true?, page-53

Dr Paul Gillis a professor of accounting at Peking University in China has written a very interesting article about cash auditing of Chinese listed companies.

http://www.chinaaccountingblog.com/weblog/auditing-cash-in-china.html


In summary:

1. Excessive cash holdings on balance sheets often indicate fraud.

2. The cash may not exist. Local bank officials can provide false confirmation to auditors.

3. Corruption in the banking sector is a problem.

4. The Chinese audit process is flawed  and unreliable.

DYOR