Cash tunnelling in Chinese firms

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dc.citation.issueSession 260en_US
dc.contributor.authorWei, Yen_US
dc.contributor.authorChen, JGen_US
dc.contributor.authorWirth, CGen_US
dc.coverage.spatialNevada, Las Vegasen_US
dc.date.available19/10/2016en_US
dc.date.finish-date22/10/2016en_US
dc.date.issued19/10/2016en_US
dc.date.start-date19/10/2016en_US
dc.description.abstractThis study investigates how controlling shareholders fraudulently extracted firm value via cash tunnelling from Chinese companies from 1998 to 2011. The evidence suggests that expropriating owners choose a balance sheet account that is not directly related to the firm’s operating business in order to record a fictitious asset, with the account remaining in the company’s books for a reasonably long time. The delay in recognising the fictitious asset as a loss in the financial statements makes it more difficult for auditors to detect the fraud. We develop two measures to estimate the total loss caused by the cash tunnelling, and estimate the loss to be two to four times net income. Evidence on the factors and process surrounding cash tunnelling is presented, and we demonstrate that the propensity to engage in tunnelling is positively related to the differential rights between controlling shareholders and minority shareholders and negatively related to firm profitability, the probability of fraud detection and the severity of the punishment.en_US
dc.description.confidentialFALSEen_US
dc.description.publication-statusPublished onlineen_US
dc.format.extent1 - 64 (64)en_US
dc.identifier.citationFMA 2016 Proceedings, 2016, (Session 260), pp. 1 - 64 (64)en_US
dc.identifier.elements-id283269
dc.identifier.harvestedMassey_Dark
dc.identifier.urihttps://hdl.handle.net/10179/10012
dc.publisherFinancial Management Associationen_US
dc.relation.isPartOfFMA 2016 Proceedingsen_US
dc.relation.urihttp://www.fma.org/Vegas/Papers/CashTunnellingInChineseFirms.pdfen_US
dc.source2016 Financial Management Association Annual Meetingen_US
dc.subjecttunnellingen_US
dc.subjectfraudulent statementsen_US
dc.subjectChinese listed firmsen_US
dc.titleCash tunnelling in Chinese firmsen_US
dc.typeConference Paper
pubs.notesNot knownen_US
pubs.organisational-group/Massey University
pubs.organisational-group/Massey University/Massey Business School
pubs.organisational-group/Massey University/Massey Business School/School of Economics and Finance
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