On Virtual Cross-border Financial Fraud

In recent years,under the framework of “The Belt and Road” policy,China's trade activities along the economic belt have become increasingly active.The enthusiasm of domestic enterprises for cross-border investment activities has been increasing.The net growth of cross-border investment in Chinese enterprises has been increasing at an annual rate of two digits,and more and more listed companies have been involved in the construction of “The Belt and Road” policy.“The Belt and Road” big data report released in September 2018 shows that the total trade volume between China and the coastal countries along has reached 6 975.623 billion during the 5 years.The growth rate of China's economic and trade growth along “The Belt and Road” coastal country is larger than that of China's total foreign trade growth.This indicates that “The Belt and Road” has become a driving force for our foreign countries.Under this policy environment,Chinese enterprises have gone abroad one after another to carry out cross-border economic business.Due to the difficulties of government supervision and external audit departments in ensuring the quality of cross-border independent auditing,cross-border financial fraud of Listed Companies in China began to occur,and the number increased year by year.According to the data released by the Securities Regulatory Commission,in 2017,11 listed companies in China were punished for financial fraud,of which two involved cross-border financial fraud.Cross-border financial fraud of Listed Companies in China has become a phenomenon that can not be ignored.Financial fraud incidents of listed companies often appear in the newspapers,which has caused a great blow to the confidence of investors.The financial fraud of the company is a typical case of financial fraud under the circumstances of “The Belt and Road”,which is asymmetric information between domestic investors and enterprises.By fabricating cross-border economic business,Yabaite's profits reached 220 million yuan,which not only seriously damaged the interests of investors,but also exposed the imperfect supervision system of our country and the incomplete examination and verification of cross-border business by the Securities Regulatory Commission.The financial fraudulent means of virtual cross-border economic operations used in the Yabaite incident are more concealed in form and pose greater challenges to regulators.In order to prevent the listed companies from making the false accounting information under the guidance of this great adverse event under the guidance of the great strategy of “The Belt and Road”,the relevant departments in our country should set up a more perfect cross-border trade supervision mechanism based on the inspiration and lessons learned from this incident.This paper takes the case analysis as the research method,chooses the financial fraud event of Yabaite to carry on the case study of virtual cross-border economic business financial fraud.Firstly,it reviews the process of financial fraud of Yabaite.From the perspective of financial statement data and non-financial data,it analyses the core of financial fraud of Yabaite through the financial performance of the company and the psychology of the main shareholders of the company.The motivation and the identification of financial fraud characteristics are analyzed.Next,this paper uses the game theory analysis from the perspective of supervision,respectively,from the perspective of external supervision and internal supervision to analyze the management's counterfeiting probability,using the Nash optimal equilibrium set model to obtain the optimal choice of managers,combined with the analysis of the identification of virtual cross-border economic business financial fraud and management recommendations to draw conclusions,in order to Yabaite's actual situation.This paper gives the experience of identifying financial fraud in cross-border economic business cases.Finally,based on the lack of supervision and information audit,this paper puts forward corresponding suggestions for improvement,so as to provide help for the supervision of cross-border economic and business-oriented financial fraud in China.