UPDATE 1-Auditor finds irregularities at Citic Sec, shrs fall

* Irregularities found at Citic Sec, ICBC, CCB

* The findings won't impact business, the three companies say

* Citic to benefit from market rally, IPO resumption (Adds ICBC and CCB, updates share prices)

By Samuel Shen and Lucy Hornby

SHANGHAI, June 23 (Reuters) - Citic Securities Co (600030.SS) said on Tuesday that state auditors had discovered some irregularities at the firm, sending shares of China's biggest-listed brokerage tumbling.

China's National Audit Office spotted problems in Citic Securities' financial treatment of incentives related to its brokerage business, the Beijing-based company said in a statement to the Shanghai Stock Exchange.

The irregularities occurred in 2007, before related rules were published, and would not have any impact on the company's performance or published results, it said.

In a routine check last year, state auditors also uncovered irregularities at Industrial & Commercial Bank of China (ICBC) (601398.SS) and China Construction Bank (CCB) (601939.SS), according to separate exchange filings. Corrections had been made and the findings had no impact on business, both lenders said.

Citic Securities shares fell nearly 5 percent at one point before closing 2.88 percent lower at 28.32 yuan. That compares with a 0.12 percent dip in the benchmark Shanghai Composite Index .SSEC.

"The impact of such problems should be short-term and negligible. The market is over-reacting," said Tian Liang, analyst at Ping An Securities Co. "We're optimistic on the future performance of the company, which would benefit from big stock market turnover and upcoming IPOs."

ICBC shares rose 1.31 percent and CCB shares ended up 3.31 percent in Shanghai, lifted by a broader rise in banking shares.

Citic Securities shares have gained more than 50 percent this year, as the stock market rallied and trading volume surged. Citic Securities also stands to benefit from China's resumption of initial public offerings this month.

Next year, big companies such as Agricultural Bank of China and China Mobile (0941.HK) may sell shares publicly in China, potentially giving Citic Securities a boost in underwriting revenue, analyst Tian said.

Citic Securities' problems were found in a state audit conducted between March and June last year at its parent Citic Group, China's biggest financial conglomerate.

The inspection came after the group's Hong Kong-listed unit, Citic Pacific (0267.HK), posted $2 billion in losses from unauthorised bets in volatile foreign exchange markets.

In addition to Citic Securities, irregularities were found at some other units of Citic Group, the statement said.

Citic Securities' problems occurred in 2007, before the government published rules in April 2008 to regulate the country's brokerage business, the company said in the statement.

"We paid high attention to the government audit, and actively cooperated," Citic Securities said. "We corrected our mistakes as we were being audited." (US$1=6.832 Yuan) (Editing by Jacqueline Wong)