Chairman Yin Jiaxu to report that extraordinary told the company in 2002 reflects a unique strategy Changan within the competitive dynamics of the automotive industry in China. Changan 2002 annual report showed an exceptional level of success for the company, with a net increase in income of 421% compared to the previous year. Chairman Yin viewing this amazing growth rate as a reward for a strategic shift in the structure of sales to higher margin Changan cars, combined with the component price declines and persistent internal efforts to reduce costs. However, an anonymous article published on the Internet include the reported success Changan in fraudulent financial reporting, attracting attention from the press, analysts, and financial web sites. At the heart of the issues raised in the article were fluctuations in quarterly gross Changan in the fields, including a significant increase in gross margin in the fourth quarter, a large amount of accrued marketing expenses on the balance sheet and reported high fields on one of its top-selling models , stars Changan SC6350 minivan. Facing suspension of trading in Changan Automobile Co 'shares on the Shenzen Stock Exchange amid widespread concerns of investors in the financial reporting practices of the company, Chairman Yin should develop a communication strategy to convince investors that the company's financial statements reflect the underlying performance of the company. "Hide
by Denis Campbell, Donglin Xia Source: Harvard Business School 17 pages. Publication Date: July 27, 2006. Prod. #: 107006-PDF-ENG
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