The Study On Financial Compliance Of ZH Company Listed By OTC

The OTC market is known as "China’s NASDAQ".China’s three major national securities exchange by otc market together with the Shanghai Stock Exchange and Shenzhen Stock Exchange.As of December 31,2016,a total of 10163 companies have listed on the otc market.Since 2017,the new OTC market have entered a new era.As the market growing,the number of companies delisted the OTC.Some companies have been delisted for ipos or acquisitions.Some companies have come out of the market because of strict supervision and financial compliance costs.Some companies are actively withdrawing from risk because of fraud.Nearly 300 companies have recently disclosed their annual reports due to financial problemsThe research of this paper is different from the research presented in the case study.This article introduces the background of the new three boards and the motive behind the listing,and then,in order to host the brokerage’s perspective,ZH energy technology co.,LTD which is an example in this article,the authors analyze the typical financial problems of ZH technology co.,LTD.According to the "Guidelines for the Use of basic standards for the listing of shares of small and medium-sized enterprises in China,this Paper make a case study on ZH Energy Technology Corporation,analyze its typical financial problems,then I summarize the requirements of listing on OTC according to《Guidelines for the Use of SME Share Transfer Systems》.Based on the typical financial problems which found in due diligence,I divided these problems into four dimensions—financial control system,internal control system,accounting estimates and tax issues.This article has the following research findings.With the process of continuous development,enterprises listed on the third board in front of the financial problems are more and more attention.With the higher standard of enterprise’s financial disclosure requirements,financial standard has become the focus of your regulation effort towards the enterprise before and after listing.So,strengthening financial regulations is very important for the enterprise before listing the third board.The main innovation of this article is the development process of the Third Broad in China,I analyze the financial problems from the internal and external aspects,offer the solution to the company and the suggestion to the regulators and intermediary agencies for providing the financial guidelines to the company which listed on the New Three Broad and the potential firms that plan to list on the OTC market.