Study On The Listed Company Of Financial Fraud Problems

With the rapid development of economic and the prosperity of industry such as finance,the number of listed companies has a sustained growth,more and more companies hope to financing and profit through the stock market.In this context,the question of whether a listed company can truthfully disclose the business and financial situation has become a particularly important issue.In recent years,financial fraud cases have been common in public companies.The efficiency of the enterprise is related to the interests of a series of stakeholders,in particular,listed companies are directly involved in the operation of the stock market,the authenticity and integrity of its financial information are more important.Financial fraud will not only harm investors and creditors,but also affect the healthy development of the market economy.So the research of listed companiescases on the typical case of financial fraud in China capital market,can better insight into the causes of financial fraud and motivation,puts forward suggestions for the prevention and management of financial fraud,is of great practical significance.This article selects the case of great wisdom company financial fraud to analysis.Shanghai great wisdom company.is a Internet financial services company,during the year of 2015 when its proclaimed restructuring with Xiangcai Securities,disclosured its violation of securities laws by CSRC,alleged financial fraud.After find out,Great wisdom company existence inflated revenues,determine the date of merger in advance of inflated profits and so on,in the year of 2013,and it become a typical case of law enforcement by CSRC in 2015.This paper analysis combines the theory with case.Firstly,describes the present situation of the company and the financial fraud means has carried on the brief description and analysis;combined with the theory of rational economic man hypothesis,namely rational actors according to the established conditions associated with other parties to determine their own decisions,to seek individual benefit maximization,based on the theory of GONE from greed factors,opportunity factors,need to factor and exposure factor four aspects analyzes the fraud motivation of great wisdom company.From the greed factor,fraud is for the maximization of individual benefit with greed psychological,avoid of loss suffered as shareholders.Judging by chance factors,the company a dominant governance structure leads to stake and management control is too concentrated,do not accord with the principle of separation of powers,the internal supervision department is also unable to function,and the audit committee of the board of supervisors non-existing,company internal control become a mere formality.From the point of need factor,the listed company performance is not stable,since by financial fraud to avoid the risk of suspension of listing.With the increase of market competition,industry rivals breakthrough in the profit model,further squeezing the great wisdom in a competitive market profits and living space,management are eager to expand beyond the traditional business sales channels,and launched a large number of purchase,but have not achieve expected results,performance is declining.Personnel in the process of expansion increased dramatically,increase the company's management costs,the company's profit model urgently seek breakthrough.Based on the need of strategic transformation,great wisdom want to merger and acquisition the company of Xiangcai Securities,in order to make the company in line with the securities company's shareholders,then through the smoke screen modify financial statements in order to pass the review of the CSRC.From the exposure factor,due to the lack of independence of external audit,and did not uphold the spirit of professional caution for certified public accountants,company did not implement the supervision function of the independent directors,the lighter punishment by CSRC and other reasons,lead to listed companies lack the sense of crisis whether fraud behavior been exposedThen from the aspects of the influence of financial fraud in the financial information,analyzes the financial fraud to the influence degree of the balance sheet,income statement,the cash flow statement and financial fraud to reflect the influence of the key indicators to the debt paying ability and profit ability.At the same time,because of financial fraud makes reports projects such as operating profit,workers' compensation payable there is biggish difference compared with previous years,and lack of reasonable explanation,so put forward by the cash flow more accurately determine the true level of enterprise management.From the perspective of asymmetric information,the company managers master the information is sufficient,and other participants in the markets such as investors,creditors,the tax authorities and audit unit cannot fully access to information,at a disadvantage.Based on the above analysis,combined with the theory of asymmetric information,in view of the exposed problems,put forward prevention management advice from the aspect of the listed company itself and the external audit level and external supervision level.From the level of the listed company itself,first of all,managers should pay attention to the internal control,and evaluate the risk of enterprise development,to establish risk early warning mechanism,establish a standardized strict information reporting system.Second,from the aspect of corporate governance,design a reasonable structure of ownership balance and improve the ability of supervision of the board of supervisors.To improve the overall internal auditors quality,form the audit-advice-and then audit process,conduct fraud audit in a targeted manner.In order to ensure its role of independent directors,it is recommended that the means of the establishment of an independent director system through legislation,strictly independent director qualifications at the same time,improve the incentive and constraint mechanism for independent directors.External audit level,gives some suggestions on strengthening the independence of the certified public accountants,at the same time strengthen the financial special project auditing.The effect of external supervision is indispensable,including to establish and perfect the system of compensation for damage to investors,supervision and timely disclosure,improve the third party evaluation.Only in this way,combine both inside and outside can effectively prevent the occurrence of financial fraud of listed companies.