More than two thirds of 1,290 large state companies covered in an official audit last year falsified their accounts, with the illegal money exceeding 100 billion yuan (HK$93.7 billion), China's top auditor said. The Workers Daily yesterday quoted Li Jinhua, auditor-general of the State Auditing Bureau, as telling an international seminar in Tianjin that such false accounting was 'a cancer' blocking the growth of the economy. Last year, his bureau had audited the assets, profits and losses of 1,290 state-owned holding companies and discovered that the accounts of 68 per cent were 'seriously falsified'. Some had made profits but reported losses, others reported profits but had made losses, with huge amounts of money circulating outside official channels and in private accounts. The amount of illegal funds exceeded 100 billion yuan. The malpractices had happened despite substantial improvements to accounting over the past 10 years, with a sharp increase in the number of qualified accountants and better professional techniques. 'But the problems of financial misinformation and fake accounting remain extremely serious and have become a cancer blocking the development of the national economy,' he said. Such cases of false accounting in listed companies had caused enormous harm in the stock market, hurting the confidence of investors and causing them enormous losses. Mr Li promised to step up official efforts to stamp out such malpractices, bring order and stability to the market and win back investor confidence. Such an astonishingly high level of false accounting is a key reason why foreign investors are suspicious of buying state companies. Asset management firms set up by the four leading state banks are trying to sell 1.4 trillion yuan in bad loans. Foreign investor interest has been lukewarm, partly because of their inability to assess accurately what they are being offered. The low standard of accounting has made the profession one of the hottest in China, with young people eager to join because they see it as having an excellent future, especially after World Trade Organisation admission. Students refer to accountancy of one of the four 'gold collar' professions, along with law, computers and finance.