Case Study Of Kunming Machine Tool's Financial Fraud Based On The Theory Of Fraud Triangle

The financial fraud of listed companies has been plaguing national securities markets for hundreds of years.Since China's capital market established,the fraudulent incidents of listed companies are not uncommon.Although China's securities market started late,it has developed rapidly.In the fierce market economy competition,enterprises are facing tremendous pressure to survive.Although China's securities market started late,it has developed rapidly.In the fierce market economy competition,enterprises are facing tremendous pressure to survive;various systems and laws Imperfections provide opportunities for corporate fraud;the decline in social integrity and the lack of professional ethics also allow fraudsters to find excuses for self-convincing.The harm of fraud in listed companies is self-evident.It not only damages the vital interests of investors,but also undermines the minimum principles of the entire securities market,making the important role of the securities market in the optimal allocation of resources disappear.It has affected the healthy and sustainable development of the national economy.Therefore,the research on financial fraud of listed companies in China has important practical significance.In this context,this paper uses the literature research and case analysis method,based on the theory of fraud triangle,tries to start from the three factors of financial fraud,and uses the actual case of listed companies to study the means,motivation and governance of financial fraud in listed companies.And put forward corresponding prevention and control measures,in order to curb financial fraud from the root causes.The analysis in this paper enriches the content of research methods,motivations and governance,can provide reference for relevant policy makers;help protect investors' interests,promote the standardized operation of listed companies,and promote the sound development of China's securities market.This paper is divided into five parts.The first part is the introduction.It introduces the research background and significance of the thesis.It summarizes the domestic and international research results of financial fraud that from means,identification and governance,then determine the research method and framework of this paper.The second part is financial fraud's concept and theoretical analysis which including comparative analysis of the concepts,and introduces the economic theory and fraud triangle theory used to explain financial fraud.The third and fourth parts are case studies.The Kunming Machine Tool that have been delisted due to financial fraud and years of losses are selected as the research object.First,the whole case is reviewed,and then analyzes how the company has continuously increased its income for many years.Excessive fees,virtual components and inventory data,major omissions in information disclosure,purchase of audit opinions and other means to implement financial fraud,and explain the impact of corporate financial fraud,and then explore the motivation of financial fraud in Kunming Machine Tool based on the theory of fraud triangle.The implementation of financial fraud by Kunming Machine Tool is the operator's continued decline in the company's profitability,wearing caps and delisting,financial stability,financing pressure factors and corporate governance structure,lack of independence of external audit institutions,weak government supervision and under the opportunity factor of low cost of violation,the operator has found the inevitable result of the excuses of rationalization of fraud.Finally,in the fifth part,the paper proposes countermeasures to prevent and control the financial fraud of listed companies in China from the aspects of relieving fraud pressure,reducing fraud opportunities and eliminating excuses,in order to curb financial fraud from the root.