Financial Fraud Case Analysis And Countermeasures Of Jiu Hao Group Company Based On Fraud Risk Factor Theory

With the rapid development of China’s market economy,the private enterprises in China have witnessed blowout growth.The intermediary platform companies led by the Internet have sprung up,and their output value accounts for half of the growth of China’s tertiary industry.Influenced by business model,platform companies should be the "pure land" of the party not affected by fraud.However,in recent years,financial fraud cases in China have gradually spread to all walks of life,and the frequency of fraud is increasing,the means of fraud are becoming more complex,and the amount of fraud is expanding.Although financial fraud will achieve the fraud target of the main body in a short time,it is difficult to escape to restore the legal net.In the end,not only the offenders will be subject to legal sanctions,but also the reputation of enterprises will be negatively affected,and the investment confidence of capital market will be severely hit.Therefore,it is particularly important to study the motivation,identification and governance of financial fraud cases.Based on the two characteristics of financial fraud cases and Internet platform companies,this paper chooses the financial fraud cases of Zhejiang Jiuhao Group as the research object.In 2017,Jiuhao Group’s "fraudulent" restructuring shocked the whole capital market.Its unique platform business model and concealed fraudulent means made it successfully hide the audit of intermediary certification agencies in the process of backdoor restructuring and listing,and falsely increased hundreds of millions of assets.And income.On the basis of combing the financial fraud process and case results of Jiuhao Group,this paper points out the harm brought by Jiuhao Group’s fraud,the main body of fraud suffers economic losses,the business of customers and suppliers has been hindered,and the investor’s confidence has alsobeen severely hit.Firstly,based on the fraud risk factors,this paper analyses the individual risk factors and general risk factors of Zhejiang Jiuhao Group.In terms of individual risk factors,the business ethics consciousness of the actual controllers,the professional ethics of the senior managers and the legal consciousness of the middle and lower level employees of Jiuhao Group are relatively weak.The main motive of corporate fraud is to achieve radical strategic objectives,and the financial situation is stretched.Enterprises attempt to obtain capital market investment by backdoor listing,and seek profits by raising valuation.In terms of general risk factors,the potential fraud opportunities of Jiuhao Group lie in the excessive concentration of equity and the collusion motivation of large interest groups to provide the possibility for the use of fraudulent means,and the restructuring counterparty also has a strong motive to sell shells and preserve the market.Internal and external auditing institutions have poor independence and can not be diligent and responsible.Old auditing methods reduce the risk of fraud exposure.Finally,the punishment deterrence of financial fraud is insufficient.Then it analyses the fraud tactics and identification of Jiuhao Group,and gives the audit and identification suggestions.Jiuhao Group’s financial fraud mainly includes three ways: increasing service fee income,increasing trade income and increasing bank deposits.However,the fraud can be identified by financial information indicators and non-financial information indicators.Non-financial information is reflected in the logical loopholes of the target transaction volume exceeding the total volume of the industry and frequent replacement of executives and audit institutions.Financial information is reflected in the differences between static and dynamic indicators and comparable companies.On the basis of the analysis of the causes and methods of fraud in Jiuhao Group,this paper puts forward pertinent governance suggestions for relevant subjects from the perspective of various risk factors.In curbing individual risk factors,we should improve the professional ethics of financial practitioners,strengthen cooperation between universities and enterprises,broaden the financing channels of enterprises,and reduce general risk factors.We should emphasize the promotion of internal control,broaden the knowledge of CPAs,innovate audit methods,promote confidential public reporting,improve investors’ insight and identification ability,and raise the ceiling of fines.Fines are used to compensate investors for losses.In addition,in view of the characteristics of platform companies like Jiuhao Group,it is suggested that auditors pay close attention to the changes in the fund pool,non-financial information and IT information in the audit process.