A Case Study On Financial Fraud Of Infotmic Co.,Ltd.

Enterprise's financial report can totally,systematically reflect its financial position,operating results and cash flows in a certain period,namely the completion of each task index.Financial report is the basis of the evaluation of management performance,through the analysis of financial data,the problems existing in the operation and management can be found timely.Then enterprise can adjust the development strategy,improving the management level.For the vast number of investors,financial report is the most convenient way that makes them know the enterprise's profitability,solvency,and so on.It is the basis that they make investment decisions.However,there are plenty of financial fraud of listed company,and the vast number of investors in the capital markets has suffered severe damage.Therefore,it is necessary to study the motivation of fraud of listed companies and put forward effective preventive measures.In 2014,through asset restructuring,Infotmic Co.,Ltd.complete listing,and the 2015 financial report was issued unable to express opinions,which was focused by regulators.In 2019,the company was verified by CSRC that there was financial fraud in 2015,and the company and relevant responsible persons were punished respectively.The financial fraud means of Infotmic Co.,Ltd.are more traditional:first,through the recognition of business income that has not occurred,it falsely increases revenue;secondly,through the virtual reduction of period expenses.Through these two ways,Infotmic Co.,Ltd.achieves the purpose of falsely increasing profit.Firstly,this paper briefly introduces the background of the financial fraud case of Infotmic Co.,Ltd.,and expounds the significance of the research from the theoretical and practical aspects.Then summarizes the research methods used in the process of the research case,as well as the research content.At the same time,it describes the theoretical basis of Fraud Triangle Theory,Principal-agent Theory and Financial Fraud Risk Index Model in detail,and combs the domestic and foreignliterature in the three fields of fraud motivation analysis,fraud risk identification and fraud prevention,so as to provide reference for the subsequent analysis.After combing the theoretical basis,this paper briefly introduces the general situation of Infotmic Co.,Ltd.,including the development process,main business and other contents,reviews the whole process of its fraud,and specifically analyzes the means of fraud and the resulting economic consequences.Then it analyzes the causes of financial fraud of Infotmic Co.,Ltd.,which can be divided into three aspects: firstly,the pressure factor.Insufficient profitability,tight capital chain,the urgent need to issue new shares for financing,reducing the impact of large performance commitment compensation on the interests of major shareholders,and avoiding delisting risks,all of these bring pressure to Infotmic Co.,Ltd..The second is the opportunity factor.Hidden dangers in the high-level power balance,significant defects in the internal control system,the loss of professional ethics of managers,and inadequate supervision,provide an opportunity for Infotmic Co.,Ltd.to implement financial fraud.The third is the excuse factor.Stabilizing the stock price and safeguarding the interests of major shareholders are all excuses for the management to rationalize themselves.Finally,the paper puts forward some suggestions to prevent financial fraud.Firstly,enhance the competitiveness of enterprise to reduce the pressure factor.Secondly,we should improve the internal governance structure,strictly implement the internal control system,strengthen the professional ethics education for the management,and formulate punishment measures that match the consequences of violations to eliminate the opportunities for fraud.Thirdly,we should attach importance to the establishment of organizational culture,so that the management can spontaneously safeguard the interests of the company and no longer find excuses for fraud.Lastly,using the fraud risk index to detect fraud and prevent fraud timely and effectively.The innovation lies in: in the case study,the fraud risk index model is quoted,and the company can identify the financial fraud as early as possible through the calculation of the fraud risk index and the comparison between the index value andthe threshold value,and analyze the fraud situation of the financial data according to the types of abnormal indexes.