A Case Study Of Financial Fraud In Zhangzidao Based On The Perspective Of Internal Control

Agriculture is our country’s primary industry and the source of our food and clothing.The development level of agricultural companies plays a vital role in the development and stability of our national economy.However,in recent years,agricultural listed companies have frequently appeared in financial fraud cases.The financial fraud of agricultural listed companies is due to the particularity of the agricultural industry itself,such as agricultural products that are vulnerable to natural disasters and extreme weather.It has a long growth cycle and a long capital recovery cycle,and it is not easy to check the inventory of agricultural companies.The means of financial fraud are relatively hidden,which creates opportunities for financial fraud.On the other hand,agricultural listed companies have weak internal control awareness and internal internal control.There are many shortcomings in control,which provide conditions for financial fraud.In order to improve the internal control of agricultural listed companies,provide high-quality financial reports for information users,and curb financial fraud,the first task is to find out which defects in internal control have led to financial fraud.In other words,Only by understanding the reasons for financial fraud can we "prescribe the right medicine."Therefore,this article takes Zhangzidao as an example to explore the causes of financial fraud from the theoretical framework of the five elements of internal control.The article first sorted out the related literature on internal control deficiencies,financial fraud motives and financial fraud methods,and had an overall grasp of the research results of this topic.Secondly,the article analyzes the current situation of Zhangzidao’s internal control,and finds that the internal control of Zhangzidao has not reached the ideal state in terms of specific implementation conditions or implementation effects,which shows that Zhangzidao must have internal control defects.Next,with the aid of the penalty announcement issued by the China Securities Regulatory Commission,the article specifically analyzes the means of financial fraud in Zhangzidao.Finally,based on the five-element framework of internal control,this article analyzes the reasons for financial fraud in Zhangzidao from five aspects: internal control environment,risk assessment,control activities,information and communication,and supervision.Falsification provides favorable conditions,and the deficiencies between the elements are not completely separated,but interact with each other,which together contributed to the financial falsification of Zhangzidao.Based on the above analysis results,this article proposes some specific solutions for Zhangzidao to improve the internal control system and correct internal control deficiencies.One is to optimize the internal control environment,the second is to improve the risk assessment mechanism,the third is to strengthen asset control activities,and the fourth is to improve the internal control environment.Strengthen the information communication mechanism,the fifth is to strengthen internal and external supervision,hoping to provide advice on improving the internal control system and improving the quality of financial reports to Zhangzidao and other listed companies with internal control deficiencies,so as to reduce the occurrence of financial fraud.