Case Analysis Of Financial Fraud On ZZD

During the past 20 years,Chinese economy has gained rapid development.The development of capital market and legal construction lays a social foundation for the boom of market economy.However,financial fraud didn’t completely disappear with enhancing systems and regulations of capital market but gained a confidential development in disguise of the changes of social environment,even adjusting more to society.The background in current era is based on the historical foundation of the socialist market economic system,and the innovation of the era that integrates the financial accounting system and the reform of the investment and financing management system.They have jointly nourished the development and growth of the capital market and listed companies.However,in the meantime,some listed companies are also eager to try in the developing trend,moving against the tide in order to falsify,prepare false financial statements and violate the interests of investors with the interests of companies or individuals.The stern phenomenon of non-compliance with laws and non-compliance with law enforcement emerged.At the same time,the share-trading reform was carried out after 2005,and our stock market has gradually entered a brand-new stage,where major shareholders can reduce their shareholding according to their wishes.It is understandable that major shareholders appropriately reduce their own shares in accordance with laws and regulations.However,in the wave of reductions,major shareholders sold stocks at high positions to reduce holdings and cash out,severely affected the company,and caused turbulence in the entire securities market.Moreover,due to increasing concealment and complexity of financial fraud measures,the difficulty of supervision,pre-warning,and risk prevention will be further increased.The combination of the two factors will have a more negative impact on the stock market.Based on Information Asymmetry Theory,Signal Transmission Theory and other related theories on shareholder reduction and financial fraud,Zhangzidao Company is selected as a specific case.Based on Zhangzidao’s major shareholders’ reduction behavior,the causes of financial fraud and the emergence of financial fraud Economic consequences are deeply analyzed.This article is mainly divided into the following four parts: first,the introduction describes the research background,significance,research methods and content of this article.Second,relevant theories of this article are introduced,which lays a solid theoretical foundation for the following article;Third,it introduces the various stages of the development of Zhangzidao’s financial fraud case in detail,and describes the means of financial fraud.At the same time,it finds the coincidence of the reduction of holdings by Zhangzidao major shareholders and the time of the financial fraud.Fourth,the motivation and economic consequences of Zhangzidao financial fraud is taken into a specific study,and specific research recommendations are also given.Finally,this article concludes that Zhangzidao’s financial fraud is mainly to conceal the profits of major shareholders from reducing their holdings.Secondly,with regard to the economic consequences of financial fraud,it can be found that this behavior is not conducive to the long-term development of the company,and at the same time it causes the falling stock price and damage to the interests of small and medium shareholders.At last,it summarizes the lesson brought by the financial fraud and provides a certain reference for how to detect and supervise the behavior of major shareholders to reduce holdings and cooperate with financial fraud in time.