A Case Study Of Eastern Gold Jade Financial Fraud Based On GONE Theory

The development of China's capital market so far,the phenomenon of financial fraud of listed companies is still repeatedly prohibited.In recent years,the fraud cases of Kangmei and Kangdexin with huge amounts have seriously damaged the interests of stakeholders,undermined investors' confidence,and caused strong fluctuations in the capital market.In view of this,this paper selects "the first stock to be compulsorily delisted in 2021" Orient Jingyu as the case study object,analyzes its fraud motive based on GONE theory,and summarizes the harm and impact of financial fraud,in order to provide some reference suggestions for the prevention and control of financial fraud of listed companies.The article firstly reviews and summarizes the domestic and foreign literature on the means,motives,hazards and governance of financial fraud,and on the basis of introducing the concept of financial fraud,elaborates and explains the GONE theory and stakeholder theory that need to be used in this paper.Then the company profile,case history and punishment results of Dongfang Jinyu are organized,and the means by which Dongfang Jinyu committed financial fraud,i.e.,fictitious bank accounts for fictitious sales and purchase transactions in order to inflate operating income and operating profit,are introduced in detail.On this basis,this paper studies the motives of financial fraud of Orient Golden Jade from four perspectives of G,O,N and E,and analyzes the harm brought by financial fraud to stakeholders according to the stakeholder theory.In terms of motivation,the company's management has low integrity and morality,ignores the legal system,and breeds greed in order to quickly revive Orient Golden Jade;the imperfect internal governance structure and internal control system,inventory,and industry practices are special,which provide opportunities for fraud;due to the pressure of the industry situation,the fraudster has a need for fraud in order to maintain his image and achieve financing purposes;considering the low exposure probability of fraud Considering that the probability of fraud exposure is small and the cost of fraud is too low,the company chooses to implement financial fraud,which leads to the fall of the industry giant "the first stock of jadeite".In terms of harm,the fraud of Orient Golden Jade has caused the company to face administrative penalties,civil lawsuits,plummeting share price and market value,and a continuous decline in credit rating,eventually being forced to be delisted;Causing small and medium-sized investors,creditors,local governments and even the capital market to suffer huge losses.In view of this,this paper suggests that: listed companies should improve their internal governance structure and improve their management by establishing feasible strategic plans and performance evaluation systems;externally,they should establish a "trinity" monitoring system and improve laws and regulations to increase the cost of fraud.In addition,this paper also provides insights from the case study on the audit system of accounting firms,management of supervisors,small and medium-sized investors and regulators,hoping to reduce the risk of financial fraud and realize the stable development of the capital market.