Case Study On Financial Fraud Of Sunlight In Ningbo

The number of domestic listed companies continues to increase,at the same time,financial fraud events occur frequently and become increasingly fierce.Financial fraud has disturbed the normal order of the securities market,damaged the interests of investors,and exposed the defects of the internal governance of enterprises.Therefore,we hope that through research on financial fraud,prevention and control in advance,we can standardize the governance of financial fraud,and promote the development of capital market more orderly and just.This paper mainly uses case study,data analysis,comparative analysis and other methods to analyze the cases of financial fraud in Ningbo Sunlight Electrical Appliance Co.,Ltd.First,the paper introduces the cases of financial fraud in Sunlight,including the basic situation of company,major events before and after fraud,fraud means,punishment results and impact.There was a performance decline after the listing of Sunlight in 2010.Under the condition of loss in 2014,the company turned loss into profit through fictitious contracts and government subsidies in 2015.Secondly,it analyzes the causes of fraud in Sunlight through the theory of fraud risk factors.Firstly,there are problems in the moral quality of the management;Secondly,due to the loss of performance,there is a motive of fraud in order to avoid delisting risk and achieve the purpose of restructuring.Thirdly,the internal control defects,the lack of efficiency of corporate governance structure lead to fraud opportunities.Fourthly,it is less likely that fraud will be found due to the difficulty of fraud detection and the weakness of external supervision institutions.Fifthly,relevant laws and regulations are not perfect,so fraud has been carried out.Then,the paper analyzes the financial doubts.The analysis shows that other accounts receivable of Sunlight have increased significantly,non operating income soared and net profit continues to decrease in 2015.In addition,the financial indicators are abnormal,such as the decline of profitability,abnormal cash flow,etc.Finally,through the financial fraud of Sunlight,this paper puts forward some suggestions to prevent the financial fraud of listed companies.From the perspective of listed companies,we should strengthen the construction of corporate integrity,formulate reasonable business strategies,improve the internal control system and improve the corporate governance structure.From the perspective of external supervision,we should improve relevant systems,including relevant laws and regulations and delisting system of listed companies,establish investor’s loss claim system,and strengthen the control of government subsidies.By increasing the punishment to the main body of fraud,we can effectively safeguard the interests of investors.Sunlight’s fraud methods are very special,which makes the fraud very hidden.Therefore,the study of this event can enrich the practical materials of fraud,supplement the theory of financial fraud motivation and the analysis of financial fraud doubts,and put forward a new perspective in the prevention of fraud.