Analysis On The IPO Financial Fraud Of Xin Tai Electric

Since the establishment of the Shanghai stock exchange market in 1990,the stock market has experienced unprecedented development.during this period of development of China's securities market,various factors have led to the problem of financial fraud,and this trend is becoming more and more intense.Before motherboard abandonment,then a small green earth,and then have Wanfu Biotechnology,Xintai Electric financial fraud in 2014,became the first due to the fraud of listed on the gem in the first listed company delisting.Xintai electric's fraudulent listing has had a very bad effect on China's stock market.The incident has seriously thwarted investor confidence and brought some panic to the stock market.For every ordinary investor,how can ordinary investors avoid investors making bad decisions.It has become a focus of research in the corporate world and academia.In this paper,through literature research,in combination with theory and case analysis method,and discusses the quantitative analysis,first of all,by combing the domestic and foreign literature,to summarize the causes of financial fraud and summarized.With Xintai electric earnings data in 2011-2015 as a case,the debt paying ability,profit ability,operation ability and development ability to four aspects to the company for five years,comparing the financial index will also change especially electrician,electrical related financial index was introduced to four aspects to the company's business performance longitudinal comparison.In turn,to identify the signals of the financial fraud of Xintai.Secondly,the methods of financial fraud are explored in terms of non-recurring profit and loss,accounts receivable and fundraising.It is found that the case company mainly USES four kinds of earnings management methods to increase company profit before going public.The methods of these four kinds of earnings management are: one is that the listed company can increase the company's net profit by adjusting the non-recurring profit and loss before it goes public.Another is that the company generates a large amount of receivables before going public,which can then inflate the company's profits and revenues.In the use of fundraising,listed companies have not been able to use the company's fund-raising efficiently after financing,and the allocation of funds has changed.However,the company has not disclosed the phenomenon.Finally,this paper analyzes the problems from these angles and puts forward some Suggestions on the similar problems of listed companies and case companies.Mainly includes the company's internal and external governance,specifically from restrict big shareholder equity,perfect the sole directors and audit committee system,perfecting the appointment system of the audit relationship,promote the professional manager market,revised accounting standards,and to raise funds information disclosure.Look at the case company and the similar problem listed company's management aspect to play a reference role.