Releasing information regarding a company’s financial accounting process, accounting disclosures allow investors and banks to accurately assess a company’s financial health and how well the company adheres to accounting principles. Effective disclosures on accounting information are critical to the improvement of the relationship between the operators, the investors and the creditors, and to the development of stock exchange market and to the achievement of allocation of resources. However, there still exists a large amount of malpractice with regard to accounting disclosures of Chinese listed companies. Fraudulent financial statement not only hinders the healthy development of the stock market and the listed companies but also brings investors numerous losses and risks that could have been avoided. Therefore, there is an increasingly voices of requiring to disclose such accurate accounting information in listed companies. Based on a case study of net cash flow from operating activities/ current liabilities aggressive accounting practices and financial statement manipulation, this paper mainly focuses on the nature of accounting information distortion and detecting some common financial statement methods. Firstly, the reason of a company’s accounting disclosures fraud is analyzed from four aspects including improper development strategy, corporate governance chaos, poor supervision of regulators, and dereliction of duty of intermediary agencies. Secondly, the analysis goes to the signals of Amoi Electronic Co., Ltd before its financial statement fraud being detected and publicized. The signals include the ratio of financial indicators, replacement of executives, and the changing of operation performance. The paper also finds out that investors cannot respond to the signals correctly, and they lack the ability to identify the distorted accounting information. Thirdly, this paper extends the research to the Electronics manufacturing industries. Finally, the paper proposes some recommendations, which is to protect the interests of investors and ensure effective operation of the securities market.