Case Study On Financial Fraud Of Selen Science Technology Based On Fraud Triangle Theory

Although China’s capital market started late compared with foreign countries,it has made many significant breakthroughs in all aspects in recent years in connection with the international capital market.China’s capital market is walking with vigorous pace towards the investors all over the world.However,in recent years,the frequent occurrence of financial fraud in China’s capital market has attracted wide attention.Through the statistics of the CSRC’s administrative punishment can be found: in the recent five years,there are many listed companies every year because of financial fraud by the CSRC’s administrative punishment..The increasingly serious financial fraud of listed companies not only affects investors’ enthusiasm for investment,but also seriously affects the normal operation order of China’s capital market,which has become a road hinder to the fitness and development of China’s capital market.In recent years,the means and methods of financial fraud events have become more and more complex,more and more concealment,longer and longer concealment time,and more and more money involved.Therefore,in order to reduce the development frequency of fraud and improve the operating conditions of China’s capital market,it is of great practical significance to study and analyze the causes of fraud and explore targeted measures to prevent and control financial fraud.This paper is divided into four parts.The first part first describes the research background and significance of this paper,and then the domestic and foreign scholars on the motivation,means,identification,prevention and governance of financial fraud research results and summarized,and established the research ideas of this paper,set up the research framework of this paper.The second part mainly introduces the basic situation of the case Selen Science Technology and its financial situation in recent years,and gives a specific description of its financial fraud incidents.The third part mainly introduces the related concepts of corporate financial fraud,the theoretical basis on which this paper mainly relies,and determines to choose the fraud triangle theory to analyze the motivation of financial fraud of Selen Science Technology.The fourth part starts from the financial fraud case of Selen Science Technology,based on the case analysis results,combined with the internal control theory from three aspects of pressure,opportunity and excuse to put forward the corresponding countermeasures to deal with financial fraud.In this paper,through the study and analysis of the causes of financial fraud of Selen Science Technology,it is found that the pressure in the causes of financial fraud of the company mainly lies in the pressure of the urgent need for funds to make up the loss,the pressure of the continuous decline of the stock price,the threat of the development caused by the unfavorable operating conditions of the company,the pressure of debt financing and the pressure of maintaining the listing status.The source of opportunities comes from the complex correlation relationship,the failure of corporate governance mechanism to play its function effectively,the complex and unstable organizational structure,the failure of internal control to play its role effectively,the dereliction of duty of external audit institutions,the low cost of fraud and violation,and the lack of deterrence of punishment.The root cause of the excuse lies in the fluke mentality of the company’s management and the ineffective development of the company’s cultural construction.Selen Science Technology is in the joint action of these three factors under the implementation of financial fraud.For Selen Science Technology the financial fraud of science and technology,science set up company’s business development strategy,competitive advantage,and vigorously promote company looking for a variety of financing channels,enhance the internal governance structure,optimize the company’s equity structure,raise the level of external audit,increase penalties for fraud,and cultivating enterprise managers moral integrity and strengthening the construction of corporate culture strength.It is hoped that the research of this paper can improve the ability of investors to identify financial fraud,strengthen the responsibility consciousness of listed companies,and strengthen the supervision and management at the external level of companies.Starting from the root causes of fraud,a targeted and strict anti-fraud system has been established to cut off the source of corporate fraud,and then effectively improve the frequent financial fraud of Selen Science Technology and other listed companies.