Censere’s Utley, though, is not surprised. In his 25 years as a financial investigator in China, he has come across all sorts of scams. One company that Utley and his team of forensic accountants was hired to investigate had 12 different sets of accounts that management used to show different groups.
One indication of the large scale of fraud is that an open market exists in China for “fapiao,” which are official sales receipts. Contraband fapiao are easy to acquire and can be used to legitimize all sorts of illegal activities, from padding expense accounts to providing cash to bribe government officials, Utley says.
Everything can be faked in China, from management’s credentials to actual locations of business, Utley claims. He is even aware of a company that took a foreign visitor on a tour of a facility it didn’t own. “The plant workers were oblivious since foreigners are rarely challenged when touring plant facilities in China, and the foreigner just off the plane, and not speaking Chinese, just assumed they were inspecting a legitimate facility.”Oh, man, that's too funny. Sure hope the "foreign visitor" was not an auditor.