The Research On Wan Fu Biotechnology Financial Fraud Case

In December 12 th 1990, Shanghai stock exchange has been established and it prompts the progress of China securities market. Since the 25 years, with the development of Chinese capital market, financial fraud has not been out of our vision field. In recent years, a lot of financial fraud cases have been happened, the two companies, Guangxia(Yinchuan) Industry Co.,Ltd. and Yunnan Green-land Biological Technology Co.Ltd., are very famous financial fraud cases. In the year 2012, Wanfu Biotechnology confessed the act of financial fraud; the event caused uproar and adverse effects. Therefore, according to the analysis of Wanfu biotechnology financial fraud case, searching the method of financial fraud, phrase the internal factors and the motivation, finding out the appropriate solutions, not only show the warns for the existing listed companies, and better to make those regulatory authorities to identify the financial fraud, but also to the further interest of investors’ confidence and make the protection, and finally to make Chinese securities market system more robust and perfect.As the first financial fraud stock in the GEM stocks market, the financial fraud case is not only cause a serious blow to Chinese capital market, resulting a great impact, but also cause irreparable harm to those investors. For the financial fraud case of Wanfu Biotechnology, firstly the studies starts from the background of topic selection and the significance of researching, exploring the ideas and methods of research; secondly do the further describe for the financial fraud case of Wanfu Biotechnology. In this part, it is mainly elaborate the company of Wanfu Biotechnology, describe its main business and product and review the entire case; then do some analysis to this case, according to the basis of searching a large number of domestic and foreign literature, the concepts of financial fraud and the financial fraud method have been introduced, and the GONE Theory has also been used. After the analysis of data and reports, found with inflated accounts receivable and repaid, and inflated a lot of works also inflated the revenues and profits, moreover hide a lot of significant transactions, the methods of financial fraud case are showed above. The After demonstrating the methods of financial fraud, the reasons of financial fraud has been analyzed by using the GONE theory, parsing the motivation and effects of internal factors and external factors. Finally, the suggestions and strategies are introduced by the four factors of GONE theory. As long as adopting the correct precautionary measures and strategies, it will improve the security of stock market, to creating a favorable investment climate, to improve the confidence of investors and make the protection for our stock market.