Lih-torng CHEN, Sz-meng YANG, Chiu-chi WEİ

79103

MEASURES TO PREVENT LISTED FIRMS FROM BEING EMPTIED: THE CASE OF TAIWAN

Purpose- Enterprises are major elements of the national economy that provide employment opportunities and innovative products that improve quality of life. They also pay tax to promote national construction. Therefore, the legal operation of enterprises gives stability to a society.  However, due to various reasons, domestic and global fraud occurs and emptying a company does most harm. Emptying means depleting a company’s assets by illicit means.Methodology- Previous studies on this issue focus mainly on one facet of the problem, such as a company’s legal responsibility, the financial consequences, the strengthening of governance, the deployment of ethics or information transparency.  Very few studies examine measures to prevent listed companies from being emptied from the perspective of regulation, control and autonomy.  This study uses a Modified Delphi Method and 30 experts to extract a consensus of measures to avoid fraud, in terms of government regulation, accountant validation and enterprise autonomy. The method uses three rounds and the results show that the most effective means is for government to establish a law that forces criminals to give back the spoils and for enterprise to regularly receive training of board members on governance. The second effective means is to establish a law that provides reward and protection for informants and for enterprises to disclose the salaries of board members. The third effective means is for government to establish an institution that is responsible for fraud, to require company transparency and to require accountants to use combined financial reports for mutual investment to discover fake investments.Findings- Careful examination of the top three effective measures shows that even though some of the methods are related to accountant validation and enterprise autonomy, their complete execution must rely on legislation.  Therefore, it is clear that government regulation is the key to avoiding fraud.Conclusion- Active regulation by the government is more effective than passive autonomy in enterprises. This conclusion is the result of deliberations by an expert panel that was composed of senior management, prosecutors and judges and accountants, so it is a company basis for legislative action.
Keywords:

Empty out, governance ethics, fraud, enterprise value,

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Research Journal of Business and Management-Cover
  • Yayın Aralığı: Yılda 4 Sayı
  • Başlangıç: 2014
  • Yayıncı: PressAcademia
Arşiv
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