Research On The Application Of Blockchain Technology In Preventing Financial Fraud Of Listed Companies

Since the establishment of the securities market,the financial fraud of listed companies in China occurs frequently.After analyzing,the reason of fundamental for the listed companies is caused by various benefits.Listed companies have forged and falsified financial statements,concealed related transactions,and used various audit and supervision loopholes,etc.,which have become fraud methods.This would ultimately lead to huge losses from the investor decisions and undermines market fairness,and creating a huge social problem.Therefore,how to prevent and control the financial fraud of listed companies through effective ways becomes an important issue to maintain the healthy development of the market.The emergence of blockchain technology has brought new ideas and means of value reconstruction and trust reconstruction for this current information interconnected society.Its inclusion of decentralized,distributed ledger,encryption algorithms,smart contracts and other technical concepts provides the possibility of unforgeable modification of data,traceability,automatic matching transactions,etc.,which also provides theoretical and technical support for the subject of preventing and controlling financial fraud of listed companies.This paper compared the financial fraud methods of several major listed companies punished by the SEC due to financial fraud between 2014 to 2020.Through the analysis of these financial fraud cases of listed companies,it summarizes and analyzes the root causes of financial fraud,including operating pressure,fraud opportunities,moral reasons and risk-return reasons,and analyzes the main common methods of financial fraud.And also proposed a blockchain model to prevent the financial fraud of listed companies by combining the structure,principle and characteristics of the technology.Although there are other scholars in China who have made some research on this topic,they just remained in the theoretical outlook or the establishment of basic models.The new blockchain model proposed in the thesis could prevent the forgery and tampering of financial data of listed companies to a certain extent,could supervise related transactions,could increase audit efficiency,etc.It has a positive effect on regulating the behavior of listed companies and preventing financial fraud of listed companies.Based on the previous scholars’ research,this paper proposed the innovative model of abandoning the public chain and establishing the dual-chain combination of private chain and alliance chain to establish the concept of big ledger.This can make the blockchain technology truly meet our national conditions in theory,make the function of preventing and controlling financial fraud of listed companies feasible under effective supervision,and make its own contribution to solve this problem.