Research On The Financial Fraud Issues Of SXY Company

In the 1990 s,the Shanghai stock exchange and Shenzhen stock exchange had been established in our country.They provide not only the orderly transaction platform for investors,but also offer the opportunity of development to listed companies.However,with the prosperous development and remarkable achievements of the capital market,the weakness of marketing function and laws result in the financial fraud happened all the time.From the First Stock Market,Growth Enterprise Market to National Equities Exchange and Quotations,from Manufacturing Industries,Agriculture to Hi-tech Industries,the fraud severely hinders the healthy and sustainable development of national economy.Financial fraud damages the resource allocation,discourages the confidence of investors,as well as destroys the financial order,which brings the hidden troubles of economic crisis.This paper combines the fraud theories and SXY case in order to summarize the precaution of fraud and promote the securities market develop healthily.First of all,the paper states the research significance and background,and shows the research methods and content;such as,the literature research method,the combination with theory and practice method and the financial statement analysis method.Meanwhile,on the basis of literature review of domestic and overseas,summarizing the method and prevention measures of financial fraud.In addition,analyzing the related concept of fraud,for example,fraud triangle theory,GONE theory and fraud risk factor theory.Secondly,introducing the SXY company,the whole process of fraud and punishment,also paying attention to the fraud methods which contain the cost capitalized and the related-party transaction.Thirdly,the paper illustrates the main inner and external fraud reasons from seven aspects which cover the incomplete corporate governance structure,the poor debt paying ability and profitability,the special of inventories and tax policy in industry,the invalid audit procedure of CPA,the breach duty of sponsor deputy,the lower cost of fraud and the defect NEEQ listing institutions.Finally,the prevention and suggestions are come up from three aspects,which including company,law regulatory and third party intermediaries.For instance,set up the the independent director system,strengthen the internal control,pay attention to the information disclosure of related-party,improve the professional skill and moral quality of management,perfect the listing audit of NEEQ,increase the the intensity of punishment,complete the audit procedure of agriculture and forestry and promote the audit skill of CPA.Furthermore,the paper claims the theory,method,reason and precaution by research information and case,which aims at reducing the listing company fraud,protecting the benefits of market participants and stimulating the prosperity development of capital market.