Research On Financial Fraud Of Sinovel From GONE Theory Perspective

In recent years,with the rapid development of China's capital market,investors pay more attentions to the financial information disclosed by listed companies,particularly the profitability indexes which have been the important basis of investors making financial decisions.Because our country capital market in the process of development has many imperfect and immature places in the development process,so the listed companies occurred frequently financial frauds which have the great harm.By taking financial fraud measures,the enterprise can bring benefits in the short term which does not match its operating status,but in the long term,supervision departments,for example the treasury,will survey these financial frauds which is harmful to the enterprise image and market position,even bankrupt the enterprise.For the vast number of investors,the financial fraud of listed companies severely damage their vital interests,further dampen the enthusiasm of their investment;For the securities market,the financial fraud of listed companies can destroy the open,fair and just market order,and eventually will seriously affect the healthy and sustainable development of our national economy.Thus,in order to protect the investors and creditors' interests and promote the healthy and orderly development of the capital market,it has become a very urgent research subject to find timely and effectively prevent the listed company of financial frauds occurred frequently.Based on Sinovel's financial fraud,this paper analyses the background the motivation and the consequences of impact of the enterprise financial fraud andpropose the corresponding countermeasures.First of all,this paper analyses the background of the Sinovel's financial fraud,including economic background,political background and industry background.Then combining the GONE theory,this paper analyzes the motivations of the Sinove's financial fraud.These motivations include the following aspects: firstly,the governors and staff' moral level is not high,lack of credit consciousness and have the desire to obtain illegitimate interests;secondly,the unreasonable corporate governance structure and equity structure and invalid internal control have provided an opportunity for the financial fraud;thirdly,in 2011 the enterprise's poor overall operating condition,huge financial pressure and aggressive business,excessive expansion and huge finance make the enterprise produce the undesirable demand of financial fraud;fourthly,enterprises' financial fraud has the relatively low possibility to be exposed because of the intermediary institutions and government regulatories' irresponsibility and the low penalties for the enterprises.For the four factors,Sinovel falsified financial data and carried out premeditated,planned,a large proportion of financial fraud in 2011.Then,this paper deeply analyses Sinovel's financial fraud the negative effects of the various stakeholders including enterprises,investors,securities market.Finally,in order to prevent Sinovel's financial fraud from happening again,this paper puts forward to the countermeasures and suggestions from four aspects,including strengthening the construction of moral and the enterprise culture foundation,reducing opportunities of fraud,reducing the adverse demand and perfecting the supervision mechanism.