A Case Study On Financial Fraud Of Kunming Machine Tool

At the same time as the rapid development of China's capital market,corporate financial fraud cases also occur frequently,and financial fraud has become more and more complicated in terms of fraud or fraud reasons.Every year,enterprises in China are investigated and punished by the Securities and Futures Commission for financial fraud.In 2017,there were more than a dozen financial fraud cases including Kunji,Yabate and Jiuhao Group.Although the number of listed public companies in China is very large,financial fraud companies are only a small part of them,but the impact of these financial fraud cases on the capital market is very huge,not only impact on related industries,but also serious damage.The interests of investors,the breadth and depth of their negative impact are huge.Therefore,under such a severe background,it is particularly important to study financial fraud cases,accurately identify various financial fraud methods,analyze their motivations,and then propose constructive financial fraud prevention measures.The financial fraud case of Kunming Machine Tool has a strong representativeness and a certain degree of particularity.At present,there are some studies on the financial fraud of Kunming machine tools,but these studies may only consider the typicality and representativeness of the financial fraud of Kunming machine tools,but ignore the particularity of its role as a state-owned enterprise and its machine tool industry.This paper uses case analysis method,takes Kunming machine tool as the research object,explores its fraud methods,analyzes its motives based on GONE theory,and puts forward some prevention with certain characteristics in combination with the characteristics of Kunming machine tool enterprises and the particularity of the industry.The strategy of financial fraud.This article is divided into five chapters.The first chapter is the introduction.This chapter mainly explains the background and research significance of the case study,the case study ideas and methods,and also includes the literature review and the interpretation of various theories applied.The literature review part mainly introduces some advanced viewpoints such as definition of financial fraud,financial fraud,financial fraud,and prevention of financial fraud at home and abroad.The theoretical basis is the connotation of the financial fraud mentioned in the article.The theory and principal-agent theory are elaborated.The second chapter is an overview of the financial fraud cases of Kunming machine tools and analysis of financial fraud methods.It mainly introduces the development history of Kunming machine tools,the financial overview of Kunming machine tools,and the ownership structure and organizational structure.The third chapter is based on GONE theory to analyze the motivation of Kunming machine tool for Kunming machine tool financial fraud.The fourth chapter puts forward some reasonable measures to prevent financial fraud for the fraudulent motives of Kunming machine tools.The fifth chapter is the conclusion.Through research and analysis,we can find that the financial fraud motivation of Kunming machine tools can be summarized from the following four dimensions: “G” is greed.This kind of greed includes both executives caused by unreasonable corporate executive incentive system.The excessive pursuit of wealth also includes Kunming machine tool its excessive pursuit of interests due to financial pressure;“O” is opportunity,internal control is flawed,audit committee,independent directors are in the form,management changes frequently,and auditor's independence exists.The existence of problems,external supervision and other reasons provide financial chaos with financial fraud;"N" is demand,financial fraud is the reason for fraud because of the need for fraud,specifically two aspects,The first is the demand for extra wealth by corporate executives,but the company's own demand for fame and fortune;“E” is exposed,and financial fraudsters only choose fraud if they think that they will not be exposed or the punishment for exposure is very light.In this case,The reason why Kunming Machine Tool conducts financial fraud is because of its own supervision and external supervision.In addition,it is very likely that the accounting firm as an external auditing agency may collude with the Kunming machine tool for auditing.This naturally makes Kunming Machine Tool take it for granted that it will not be exposed and will be financially fraudulent.In view of the fraudulent motivation of Kunming machine tools,this paper combines the characteristics of Kunming machine tools and the particularity of the machine tool industry,and puts forward some practical strategies to prevent financial fraud.First,we must establish a reasonable state-owned enterprise executive incentive and assessment system,improve internal control: establish a scientific internal control system,correctly handle the relationship between the board of directors,management and the board of supervisors to establish internal control supervision,evaluation and feedback mechanisms.Eliminate the unstable factors of the company's own existence,and do not give financial fraudsters a chance.Secondly,it is necessary to improve the audit market environment,eliminate the restrictions on CPAs within the enterprise,strive to improve the professional ethics of CPAs,and thus improve the audit independence of CPAs,so that auditors can be objective and fair when issuing audit opinions.Finally,it is necessary to improve the business environment,improve relevant laws and regulations,increase penalties for financial fraud,and strengthen supervision of the CPA industry,so as to eliminate the potential drivers of fraud from the external perspective of enterprises,and make enterprises healthy and sustainable.development of.