Study Of The Analysis And Control Financial Fraud Based On Game Theory

Since entering the 21 st century,China's capital market has experienced hardships and challenges.Through continuous reform and development,it has become an integral part of China's national economy and daily life.Since the establishment of the Shanghai Stock Exchange in 1990,the stock market in China has been developing for nearly 28 years.The development path of China's securities market is rugged,the market system and related laws and regulations are still being gradually improved,which also provides a hotbed for financial fraud.In the context of XTEC fraud cases,this article builds a supervisory model and an audit model based on “the supervision model”.The specific path of the game analysis is to extract the three elements of game analysis,which are participants,strategy and payment,through the analysis of the behaviors of Xin Tai Electric,Xinghua Accouting Firm and the China Securities Regulatory Commission in the case,tobuild enterprises,audit institutions,and regulatory agencies as the participant's game model.Based on the "rational economic man" hypothesis,the article is balanced by companies,audit institutions,and regulators.The game participant will reach an equilibrium state,and find an equilibrium solution for the probability that the firm chooses financial fraud under equilibrium,an equilibrium solution for the probability of the audit organization selecting the low quality audit,and an equilibrium solution for the probability of the supervisory department selecting the inspection.Throughanalysingthe balance of the three solutions,the influencing factors related to the probability of companies choosing financial frauds,the probability of auditors selecting low-quality audits,and the probability of supervisors selecting inspections were found.The purpose of the analysis using game theory is to guide the participants to the ideal equilibrium by changing the rules of the game.By improving the current policy,the probability of companies choosing financial frauds,the probability of auditors selecting low-quality audits,and the probability of supervisors selecting inspections are brought to an ideal state.Therefore,the article concludes from the perspective of the government and draws conclusions from game analysis.It puts forward countermeasures and suggestions for preventing financial frauds,hoping to effectively control the occurrence of financial frauds and promote the healthy development of China's capital market.