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

After more than 30 years of development,China’s capital market has achieved remarkable results,but financial fraud is still happened repeatedly.How to prevent corporate financial fraud is still one of the difficulties faced by the capital market and regulators.With the advent of a well-off society in an all-round way,consumer goods such as jewelry,jade and jade continue to enter ordinary people’s homes and become the objects of investment and consumption of consumers.A number of jewelry companies have been able to enter the capital market and become listed companies.However,due to the particularity of its subject matter,the difficulty of identification and the complexity of valuation,the jewelry industry not only brings great difficulties to supervision and audit,but also gives some enterprises with ulterior motives the opportunity of fraud.Due to the particularity of the jewelry industry and the lack of existing case studies on financial fraud of enterprises in the jewelry industry,this paper selects Eastern Gold Jade,which has been delisted due to fraud in the jewelry industry,for case analysis,shows the particularity of financial fraud of jewelry enterprises,expands the scope of financial fraud research,and provides some references for fraud prevention and industry supervision of jewelry listed companies.Eastern Gold Jade,the case company,took advantage of the characteristics that suppliers and customers in the jewelry industry may be individuals.When faced with continuous decline in performance and financing pressure,the company had strong demand and motivation to do a financial fraud,it temporarily avoided the risk of delisting by fabricating the transactin between related party companies and trading partners,but it was finally found and delisted by the regulatory authorities.Based on the GONE theory,this paper systematically,comprehensively and deeply analyzes the greed factors,opportunity factors,need factors and exposure factors of Eastern Gold Jade’s financial fraud,and it fully shows the motivation and success reasons of Eastern Gold Jade’s financial fraud by taking advantage of the particularity of jewelry products,in order to provide some warnings to capital market participants.Firstly,the paper introduces the relevant theories of financial fraud,and summarizes the current situation of financial fraud at home and abroad;Then it shows the relevant situation of Eastern Gold Jade and the whole process of its financial fraud;Thirdly,this paper makes an in-depth analysis of the motivation of Eastern Gold Jade’s financial fraud by using the GONE theory,and focuses on the means of Eastern Gold Jade’s fraud by taking advantage of the particularity of the jewelry industry;Finally,this paper puts forward the countermeasures to prevent the fraud and governance of jewelry companies in the capital market,in order to give the Countermeasures for the supervision authorities to participate in the capital market.