While I'm not saying it's the case, if you are suggesting that...

While I'm not saying it's the case, if you are suggesting that the auditors have looked at the numbers and the Chinese tax office could and so there couldn't be accounting fraud then that's probably a bit disingenuous or naïve.

There are many companies that have been way more high profile that have carried out such acts and didn't get caught for a long time (or caught at all). Satyam in India didn't have the cash they said, plenty of companies never had factories they had on their books, Enron was a market darling, Tescos in the UK just recently inflation numbers through booking rebates incorrectly, the famous company that had inventory holdings of more than the world's annual supply of olive oil, or oil companies where there was water under the oil in the tanks (good old trick that one...) - the list goes on and on and most of those were companies where shareholders actually had faith in the management..... as mentioned, while I'm not saying it is the case and wouldn't want to infer as much, I wouldn't ever discount the possibility as it's happened plenty of times across the board...Bear in mind that an auditor is not there to prevent or detect fraud, rather have a reasonable, not absolute, chance of detecting material fraud (have a read of ASA 240).