Research On The Financial Fraud Of Er Kang Pharmacy Which Is The "White Horse" In Pharmaceutical Industry

Along with the continuous expansion of China's capital market capacity,the problems of listed companies such as imaginary assets,fictitious profits,major omissions,false narratives and delayed disclosures have become increasingly prominent.In recent years,the problem of financial fraud has been involved in various industries of listed companies,and it has been repeatedly banned,especially in the pharmaceutical industry.Due to the lack of concentration in the market,various links such as circulation and reselling are complicated and difficult to regulate,creating opportunities for financial fraud.At the same time,as a high-tech industry,the pharmaceutical industry needs a lot of research and development and innovation.The fierce competition has led to frequent occurrences of financial fraud in the pharmaceutical industry in China.It is worth noting that Erkang Pharmaceutical,which has always been regarded as a good performer in the pharmaceutical industry,has not hesitated to take risks,and has inflated profits of 248 million in the 2015 and 2016 annual reports,which in turn reflects the efficiency of China's pharmaceutical capital market information.The status quo of low quality and poor information disclosure.The financial fraud problem in the pharmaceutical industry needs further investigation.Otherwise,it will not only mislead investors to make wrong judgments and decisions,resulting in loss of their own economy,but also the allocation of resources in the capital market.Balance,harming the orderly and healthy development of China's capital market.This paper takes the case of financial fraud of “White Horse Shares” Erkang Pharmaceutical in the pharmaceutical industry as the research object,based on the research results of financial fraud by famous scholars,combined with the theory of financial fraud,first analyzes the development status of the pharmaceutical industry and the characteristics of financial fraud in the industry from a macro perspective;From the microscopic point of view,the paper explores the financial fraud case of the pharmaceutical industry “White Horse Shares”Erkang Pharmaceutical,and uses financial analysis method combined with risk factor theory to analyze the motivation,means,identification and impact of financial fraud in detail;finally,according to the case of financial fraud of Er Kang Pharmaceutical The analysis and the characteristics of financial fraud in the pharmaceutical industry,from the perspective of preventing individual risk factors and general risk factors,put forward measures and suggestions for preventing internal financial,financial and financial fraud behaviors of the company.Based on the case study,we can come to these conclusions: First,as a “white horse stock”in the pharmaceutical industry,Er Kang Pharmaceutical's financial fraud behavior is similar to that of the pharmaceutical industry,but it has its particularity.This case shows Enterprises with high performance and good prospects may also have financial fraud motives.In the context of rapid industry development,companies are more likely to risk financial fraud in order to maintain their position in the industry.Second,financial fraud can be effectively identified before being exposed.It can be further explored from three aspects: external information,internal information of the enterprise,and analysis of its financial data and financial indicators.Third,The financial fraud of Elkang has had a negative impact on stakeholders,the company itself and the industry in which it operates,the prevention and governance of the financial fraud problem of Erkang Pharmaceutical needs to work together,among which the establishment and improvement of relevant systems and The penalties for fraud are the most fundamental solution.