Research On The Fraud Of *ST Conde's Related Party Transaction

Related Party transaction is a common form of transaction in economic activities.It is a kind of business activity in which enterprises transfer the risks and obligations of products to related parties through the transfer of resources.Of course,the related party transaction is also a double-edged sword.On the one hand,the related party transaction can promote the company to expand the scale of operation,reduce the company's transaction cost,and enhance the mastery of each transaction link,to improve the profit level and business performance of the enterprise;however,while increasing the profit,there will be some drawbacks,because the transfer pricing strategy of related party transaction business can be formulated internally,therefore,the transaction price is usually a big loophole for the affiliated enterprises to engage in fraud.Through unfair transfer pricing,the affiliated enterprises can realize their own benefits to beautify the financial data,pose a threat to the interests of minority shareholders or creditors.In recent years,the fraud of related party transactions of companies listed on Small and medium-sized boards in China has been especially serious.It has not only caused a decline in their own companies' operating results,increased financial risks and delisting risks,but also harmed the interests of small and medium-sized investors,at the same time,it affects the efficiency of resource allocation in the securities market and damages the confidence of investors.Therefore,the research of related party transaction fraud in this paper has important theoretical and practical significance.The first chapter of this paper sorts out and analyzes the domestic and foreign literatures about the research of fraud motivation,financial fraud identification and related transaction fraud,and the second chapter defines related concepts of related transaction and financial fraud,related transactions and financial fraud related to the theory was expounded;In the third chapter,the author makes a deep analysis of the fraud facts and the implementation ways of related transactions of *ST Kangde New Composite Materials Group Co.,Ltd.(hereinafter referred to as *ST Kangde)from four aspects: Enhancing the company's operating performance by entrustment,fraud in financial statements,illegal signing of cash agreements and making up the company's funds by means of related party purchase and sale The Fourth Chapter uses the Fraud Triangle Theory to study *ST Conde Related Party Transaction Fraud,in the pressure,the opportunity,the excuse factor has carried on the analysis.The main driver of the fraud in the *ST Conde Related Party transactions was the pressure on the company to continue to deteriorate in its financial position and to delist,such as declining profitability and solvency,and a significant deterioration in its operating capacity.Secondly,the internal organization structure is unreasonable,the company system and management loopholes,intermediary institutions do not fulfill the duty of diligence,supervision department supervision is not in place and low cost of fraud;Opportunity factors provide opportunity for the occurrence of fraud in *ST Conde Related Party Transactions;The Fifth Chapter Analyzes and studies the influence of *ST Conde Related Party transaction fraud to the enterprise itself from three aspects: the decline of operating performance,the increase of financial risk and the risk of delisting,and the damage to the enterprise image and market value.This paper analyzes the influence of the fraud of ST Conde's related party transaction on the society from two aspects: The sharp drop of stock price harms the interests of small and medium-sized investors,affects the efficiency of resource allocation in the securities market,and affects the confidence of investors,the countermeasures and suggestions are put forward from three aspects.On the one hand,the improvement of the internal governance mechanism,including optimizing the ownership structure,giving full play to the supervision role of independent directors,strengthening the supervisory function of the Board of supervisors,improving the incentive and restraint mechanism of senior managers;The second aspect is to strengthen the ethical construction of listed companies,including strengthening the ethical culture of enterprises,enhancing the ethical awareness of managers,and strengthening the ethical awareness of intermediaries The third aspect is to strengthen the external accounting management of related party transactions,including strengthening the auditing of the Certified Public Accountant,strengthening the supervision of the CSRC and the Stock Exchange,and strengthening the treatment of fraud.