A Case Study Of Financial Fraud Of KINGENTA Based On The Theory Of Fraud Five Pointed Star

In recent years,in the face of the increasingly complex economic situation at home and abroad,all walks of life are facing severe operating pressure.In order to maintain the image of sound operation,many enterprises have more intense and diverse motives to whitewash their statements.Even many recognized "white horse shares" cannot escape the minefield.The amount of single fraud is up to hundreds of millions of yuan,and the means of fraud are increasingly complex,systematic,and hidden,The nonstandard information disclosure not only makes investors and other stakeholders unable to accurately judge the true situation of the company,resulting in huge economic losses due to decision-making mistakes,but also hinders the orderly and healthy development of China’s capital market.Therefore,if we want to take effective measures to prevent financial fraud of listed companies,we need to identify the causes and means of financial fraud of listed companies in a timely and accurate manner,so as to suit the remedy to the case.In view of this,this paper selects the financial fraud case of Kim Jong Dae,a leading private enterprise in the fertilizer industry,as the research object.Based on relevant theories,it first introduces the basic situation of Kim Jong Dae’s industry and the company itself,and analyzes the main means used in the whole process of fraud with the help of abnormal financial data.Then,taking the risk factor theory as the main analysis framework,it explores the deep-seated motivation of fraud from five aspects: moral quality,motivation,opportunity,possibility of exposure and degree of punishment.The analysis found that since its listing,Kim Jong Dae has invested a lot of resources in order to consolidate its market position,expand its production capacity or adapt to the national policy adjustment,transformation and upgrading in the early stage,which has led to a growing tension in the capital chain and a deep financial and operational crisis.In addition,the company’s internal control has significant defects in daily operation and supervision,Wan Lianbu,the actual controller and chairman of the company,and other core senior executives of the company collectively override the internal control and implement this five-year financial fraud in a premeditated,organized and planned way.This situation is relatively rare and typical in China’s capital market.At the same time,the positive image created by the company in the past also affected the judgment of small and medium-sized investors and audit and other supervision institutions on the actual situation of the company,reducing the possibility of its exposure.Compared with the huge profits obtained by fraudsters,the punishment of illegal securities acts in the old Securities Law was negligible,which encouraged listed companies to commit fraud.Based on the analysis of the causes of financial fraud of the listed company Kim Jong Dae,the following conclusions and countermeasures are drawn: First,the distortion of moral quality is the subjective factor that induces fraud,so it is necessary to strengthen the professional ethics education for employees,especially the senior executives should actively play the role of "head goose" and create an enterprise environment of integrity and law-abiding;Second,motives are not pure catalysts for fraud.It is necessary to improve the enterprise’s internal performance appraisal system and capital structure,formulate a development path consistent with the actual situation of the enterprise,and stop the enterprise’s fraud motives from the source;Third,opportunities are breeding grounds for fraud.We can improve the quality of accounting information disclosure by improving the company’s internal control system and governance structure to reduce fraud opportunities;Fourth,the low possibility of exposure provides a living space for fraud.It is necessary to build an effective real-time identification and early warning mechanism for financial fraud,improve the sensitivity of internal and external regulatory departments of enterprises to abnormal information of enterprises,and increase the probability of financial fraud exposure of listed companies by virtue of the communication advantages and strength of new media.It is urgent to further improve the way and intensity of punishment for securities violations,complement the weaknesses of the civil compensation system,and strengthen the legal construction of the capital market so that they can not commit fraud.