Research On Enterprise Financial Fraud In Mergers And Acquisition

The securities market in China is maturing with the rapid development of economy,while some private enterprises want to raise funds through mergers,acquisitions,reorganization and listing.Driven by huge interests,some enterprises do not hesitate to resort to financial fraud to achieve the listing when they fail to meet the listing requirements.Statistics on the punishment records of the CSRC show that corporate financial fraud still shows a high growth trend.The impact of financial fraud is not only serious but also extensive,It not only hurts the interests of users of statements,damages the image of the company,but also disrupts the order of the securities market and more importantly,endangers the development of the national economy.Therefore,it is of theoretical and practical significance to study how to prevent the financial fraud of enterprises in their process of mergers and acquisitions.The article selects the first case of financial fraud in platform-based service companies – Nine Top Group.In 2017,Nine Top Group acquired and reorganized Anzhong Heavy's shares.After being reported,it was found to have significant fraud.It was approved by the China Securities Regulatory Commission as a “flickering” reorganization of fraudulent enterprises.The research in this paper combines the two areas of mergers and acquisitions and financial fraud,and locates the research perspective in mergers and acquisitions,selects the recent typical cases of mergers and acquisitions,and analyzes the financial aspects of counterfeiting methods different from traditional industries.At the time of development,with the increasing trend of industrial integration and synergy,the merger and reorganization of the Internet industry and traditional manufacturing industry has become more frequent,so it is of great significance to propose preventive measures and measures for subsequent companies of the same type.Secondly,this case is the first financial fraud incident of the platform-type service enterprises that have been punished by the China Securities Regulatory Commission since the revision of the "Restructuring Measures" in 2016.The amount is large,involving a wide range of subjects and the nature is bad,and it has certain responsibility.In this thesis,Nine Top Group,the main body in the first case of financial fraud in platform service enterprises,is selected as the analysis object.In 2017,Nine Top Group was listed by China Securities Regulatory Commission(CSRC)as a fraudulent enterprise with a “fool-like” restructuring.This thesis,on the basis of GONE theory,a comprehensive and in-depth analysis was carried out,also the factors,identification,means and governance of financial fraud are reviewed by summarizing the existing literature on financial fraud by scholars within China and in foreign countries.GONE theory is used as the theoretical basis to support the writing of this thesis.The theory holds that corporate fraud is formed by four factors,namely,greed,opportunity,demand and exposure.After reviewing the whole process of the fraud incident of Nine Top Group,this thesis analyzes in detail the fraud means,namely,to beautify the financial statements by inflating the platform service fee,fictitious trade income and unrealized bank deposits and undisclosed loan pledges to inflate assets,so as to achieve the purpose of successful merger and reorganization as well as backdown listing.On this basis,from the four factors of G,O,N and E,this thesis makes an in-depth analysis and summarizes the motivation of Nine Top Group to cheat even if it may be risky.Its motivation is mainly reflected in the following aspects: greed factor is reflected in excessive greed for the interests of enterprises and individuals,demand factor is reflected in the urgent desire of Nine Top Group to list,while opportunity and exposure factor are reflected in internal corporate governance confusion and external institutions and supervision are not in place.Through the case study of Nine Top Group,it is found that the Nine Top Group Incident is of a milestone significance in the history of the development of the securities market in China,because it is the first platform service platform,and the Group participates in a wide range of fraudulent and cheating,and the money involved is huge,which has a extremely negative impact.This case could act as a deterrent to subsequent related enterprises in the wave of Internet economic development,and is conducive to the scientific operation of the capital market and the establishment of an efficient investor protection mechanism.And it will also do good to the improvement of the efficiency and effectiveness of supervision,and the construction of a harmonious economic environment.