"With the IPO review process slowing down, it is a good opportunity for the regulator to start a deep reform to resolve some key problems, like firms dressing up their business performance by disclosing false profit data," Tu Chunhui, general manager of the research department at China Development Bank Securities, told the Global Times.
The CSRC will conduct regular investigations into the accuracy of companies' financial reports, a move that used to be taken by the regulator only when companies were found to have some serious financial issues, according to the statement.
"Faking of balance sheets by companies is unacceptable, and is much worse than a decline in their business profits," an insider at an investment bank who attended the meeting was quoted as saying by the 21st Century Business Herald.
Weighed down by the slowing economy, 30 companies that got listed on mainland stock exchanges in the first half of 2012 saw a decline in profits, with 6 percent of them seeing a profit slump of more than 50 percent year-on-year, according to the CSRC.
Some 49 percent of China's 1,689 listed non-financial companies are suspected of having offered inaccurate data in their financial reports in 2012, with the largest proportion in the real estate industry, according to an assessment of financial reports e-mailed to the Global Times on January 6 by the Chinese Academy of International Trade and Economic Cooperation, a consultancy under the Ministry of Commerce.
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