A Study On Financial Fraud Motivation And Audit Measures Of Environmental Protection Enterprises Based On The Perspective Of Risk Factors

Since the establishment of China’s capital market,financial fraud has also been emerging in an endless stream.Especially in recent years,under the background that China’s environmental protection industry has become a national strategic emerging industry,many enterprises in the industry have frequently encounter problems,either financial fraud or substantial impairment.It has caused extremely bad and extensive impact on the environmental protection industry,capital market and society.Therefore,based on the theory of enterprise risk factor,which is currently the most comprehensive fraud motivation theory,this article combines theory with practical cases to conduct in-depth research on financial fraud and audit strategies of environmental protection enterprises.First of all,this paper conducted a comprehensive study on the environmental protection industry and its fraud situation.After analyzing the industry characteristics and development stages,by organizing the list of environmental protection enterprises punished for financial fraud from 2008 to 2020,and analyzing the commonly used fraud methods of environmental protection enterprises,it was found that most of them focus on three aspects:fabricating financial data,omitting and concealing publicly disclosed information.Then,from the perspective of risk factor,it makes a general analysis of the causes of financial fraud in the environmental protection industry.We selected the former environmental protection "giant"-Shenwu Environmental Protection Technology Co.,Ltd as the case object,deeply studied the process and means of the company’s financial fraud,analyzed its financial fraud motivation from the perspective of five risk factor,and found its main problems.Among them,the main problem with the opportunity factor is the management loophole caused by obsession with capital and irrational expansion,and the complex relationship between related parties;The main problems in terms of exposure factors are that financial fraud is difficult to expose due to the dominance of a single company,multiple overlapping roles of executives,lack of industry audit experience among auditors,and blind trust from the outside world;The main problem with the punishment factor is that the punishment intensity is too light and the deterrent force is insufficient;In terms of moral quality factors,the main problem is that executives are deeply trapped in gamblers’ psychology and lack of sense of responsibility and collective concept;The main issues in terms of motivation factors are capital,shell pressure,and arbitrage motivation of policy incentives.In response to the opportunities,exposures,moral qualities,and motivational factors of financial fraud in Shenwu Environmental Protection Technology Co.,Ltd,this article proposes audit response strategies for financial fraud behavior in environmental protection enterprises.This paper believes that for the opportunity factor,auditors should implement special audit procedure for executives beyond their authority,and strengthen the audit of environmental protection projects and related party transaction fraud;Regarding exposure factors,the accounting firm needs to cultivate auditing expertise in the environmental protection industry and focus on communication with management;Regarding ethical factors,accounting firms should improve their audit informatization,promote the construction of audit ethics,and improve their quality control system;Regarding motivation factors,auditors should enhance their understanding of the environmental protection industry environment and strengthen the audit of accounts receivable and prepayments.