AEROCOM Listed Companies' Financial Fraud And Its Prevention

On the account of the form of capital market,financial fraud case,as a core of the listed companies,occurs frequently which leads to the damaged credit mechanism of capital market and the fact that investors suffered huge losses.Chinese capital market cannot leave millions of investors,both of them are complement to each other simultaneously.In recent years,with the increasing of fraud cases,this will make people feel wariness of the securities market,while small and medium-sized investors will act as a relatively weak side due to the hysteresis of obtaining the information.When large shareholders erode the interests of minority shareholders through making use of the inside information and fraud,companies will be regarded as having no credibility.Thus,small and medium-sized investors will be away from the stock market which results to the shrinking assets of listed companies and the fact that the interests of the creditors are the worst hit.This paper,through the analysis of HTTX which leaves no means untried in the aspect of financial fraud means,is hoping to help investors more comprehensively understand the phenomenon of financial fraud in Chinese capital markets,thus effectively identify the listed company financial vulnerability.This article chooses the way which uses the fraud triangle theory as a starting point and detailed analyzes the factors a company needs when it is in the fraud,such as pressure,opportunity and excuse.Whichever factor is lacked,puts forward management advice about its fraud behavior and detailed analyze of the ins and outs of the calendar year financial fraud of HTTX,so as to reduce or even eliminate the inducements of the fraud behaviors in HTTX,thus fundamentally curb HTTX's financial fraud behaviors.Also,this article from point to surface analyzes how capital market should from inside to outside strengthen market supervision and regulation when facing the status of today's frequent frauds.The main contribution of this article includes the following aspects.In the analysis of HTTX's financial fraud case for consecutive years,this article systemically analyzes how to deal with market risk and questions about the internal information disclosure system of HTTX and regulatory supervision.This article,combined with three aspects of fraud triangle theory which includes motivation,opportunity and excuse,puts forward a series of suggestions for regulators,companies and investors,aiming at helping investors in the secondary market who were not involved in management of the company,by analyzing the financial report of listed companies and through the main financial indicators,to identify whether its investment company have the suspicion of financial fraud,and protection of rights and interests of investors,and strengthen the market information.There are six sections in this article.The first chapter is the introduction,the last chapter is conclusion.Besides,the second part to the fifth part is the focus of the full text content.The second part is the summary of financial fraud,which describes the financial fraud from four aspects including definition,motivation and main methods,hoping to provide theoretical basis for later analysis of the case.The third part is the description of HTTX's financial fraud case.firstly,it introduces the background of HTTX and mainly involves the management present situation and the governance structure,then,it analyzes the motivations of the four times financial fraud behaviors of HTTX and points out means of financial fraud that HTTX adopts,laying the foundation for later analysis.The fourth part is the analysis of the causes of financial fraud in HTTX.This article is based on the fraud triangle theory to analyze the causes of the opportunity,pressure and excuse throughout the full text.The fifth part,combined with the fourth chapter,provides the measures to prevent financial fraud for the entire capital market,through the study of the systemic analysis of the causes of financial fraud,and then puts forward the corresponding solutions to reduce the risk of financial fraud happening again.Characteristics and innovation of this paper lies in three aspects.Firstly,this paper deeply analyzes the case of HTTX's financial fraud based on the fraud triangle theory,and then finds out the main financial fraud motivations of Chinese enterprise,and using the three factors of the fraud triangle theory as the breakthrough point,puts forward reasonable advice on the management of financial fraud and corporate governance measures to circumvent the risk of fraud in HTTX.Secondly,the case that this paper uses is the latest financial fraud cases whose investigation and penalty result of securities regulatory commission is issued by sina financial securities in 2015,so as to make the corresponding research conclusion is more practical,timeliness and pertinence.