Case Study On Financial Fraud Of JH Group Based On Fraud Triangle Theory

After more than two decades of positive development,China's capital market has undergone tremendous changes and has a considerable scale.At the same time,the economic situation is changing every day.With this comes not only the prosperity of the domestic market,but also the frequent financial fraud of listed companies.The occurrence of these financial fraud incidents has caused the public to doubt the authenticity of financial accounting information,which has attracted the attention of large investors and the public,and has hindered the development of the capital market.Nowadays,it can be seen that financial fraud is appearing in various forms in front of the public.It is no longer a few simple and easy to identify methods that the public is familiar with.The financial fraud method is becoming more and more novel and the financial fraud is getting longer and longer.The amount of financial fraud is increasing.In the long run,both as investors of listed companies and ordinary citizens 'confidence in the capital market will be greatly damaged.The uncontrolled growth of financial fraud will even hinder the reasonable allocation of social resources and greatly damage the healthy development of China's market economy.In 2017,the investigation and punishment of the JH Group's financial fraud case by the Securities and Futures Commission attracted widespread attention from all walks of life and triggered people's eyes.This case of financial fraud has caused the outside world to be unfamiliar with its counterfeiting methods because of its novel fields,and its extremely high concealment makes people pay more attention to cases of this type of bad nature.In JH Group's financial fraud cases,the company and the intermediary agency hired XN Securities,LAD Accounting Office and TY Law Firm have bad behavior.Taking the financial fraud case of JH Group as an example,based on the literature review at home and abroad,this paper chooses the fraud triangle theory as the research framework to carry out case analysis.The fraudulent means adopted by the JH Group mainly include inflated service fees,inflated trade income,inflated assets,and concealed liabilities.This article explores the motives of financial fraud in JH Group and finds that the reasons for the three factors of pressure,opportunity,and self-rationalization are:borrowing money,pressure on AZ shares,pressure on the desire to go public,and internal financial chaos.The internal governance structure of the company is improper,the investigation of AZ shares is flawed,the equivalence between fraud costs and profits,and the company managers have formed fluke psychology and self-comfort psychology.Based on the three factors of the fraud triangle theory,we put forward measures for such financial fraud incidents: formulating a scientific management strategy,broadening the company's financing channels,and improving the internal management of the company.Intermediary organizations and selling "shell" companies need to be cautious and increase penalties.Cultivate the ethical integrity of the company's managers and strengthen the company's cultural construction.It is hoped that through the research of this article,it will help to guide the financial fraud work of listed companies through the theory of fraud triangle.