Financial Fraud Case Study Of ST Tongzhou Based On Fraud Risk Factor Theory

With the rapid development of economy,the number of listed companies increases significantly and the quality continues to improve,but the financial frauds emerge one after another,which not only affects the normal social and economic order,destroys the social integrity system,but also facilitates economic crimes,which has a very bad impact.Therefore,the financial frauds of listed companies need to be solved urgently.In July 2021,the General Office of the CPC Central Committee and The General Office of the State Council issued the Opinions on Strictly Cracking Down on Illegal Securities Activities according to Law,which clearly pointed out that false statements,financial fraud and other illegal activities should be investigated and dealt with strictly and severely according to law,so as to crack down on the current situation.Irregular inspection,typical,highlights the country’s "zero tolerance" of the fight against financial fraud,to optimize the allocation of resources,protect the legitimate rights and interests of investors,to create a good market order has a very important significance.Based on the theory of fraud risk factor,this paper analyzes the financial fraud incidents of ST Tongzhou companies.Firstly,the research background,theoretical significance and practical significance of this paper are introduced,the relevant literature is sorted out in detail,and the research status at home and abroad is summarized and reviewed.As the theoretical basis,the research idea is put forward,and the research content,application methods and the overall research framework are briefly introduced,and the innovation points of this paper are pointed out.At the same time,it defines the definition of financial fraud and introduces the theories related to financial fraud.Secondly,the ST Tongzhou company fraud case is summarized,the fraud event is reviewed,introduced the means used by the company to carry out financial fraud,and the economic consequences of the company’s financial fraud are analyzed.Factor analysis method is used to analyze the motivation of the company’s financial fraud.The analysis methods of general factor and individual factor are respectively applied to identify the fraud of relevant financial indicators.In the selection of indicators,mainly financial indicators that can reflect the company’s profitability,growth ability,operation ability and debt paying ability.At the same time,the logistic regression model was established to identify their fraudulent behaviors.Finally,based on the analysis of fraud risk factors,combined with the silent spiral theory,the paper puts forward the corresponding countermeasures to prevent fraud risk,and draws the research conclusions and prospects.This paper takes ST Tongzhou as an example to study financial fraud and draws the conclusion that: first,ST Tongzhou company mainly adopts three financial fraud means: early confirmation of employee compensation liabilities,delayed recognition of asset impairment losses,fictitious sales income.Its fraud affects the social trust system,affects the company’s reputation image,and has a bad impact on investors and creditors.Secondly,through the study of ST related financial indicators,we can find the signs of financial fraud;The application of logistic regression model in this case can also identify the fraudulent behavior to a certain extent.Finally,the main reasons for financial fraud in ST Tongzhou companies are as follows: the company has problems in operation to prevent forced delisting,the transformation pressure is large,the real controller wants to quit by selling shell,the moral quality of the management and employees is poor,the internal control system is ineffective,the regulatory authority is less powerful,and the fraud cost is low.The innovation points of this paper are as follows: First,the selection of cases is novel.Shenzhen Tongzhou Electronics Co.,LTD.,a key software enterprise in the national planning layout,is selected in this paper.The selection of cases is timeliness and representativeness;The second is the diversification of research perspectives.In this paper,in order to eliminate the general factors and special factors when putting forward countermeasures to prevent financial fraud,the paper considers from the perspective of diversification and uses the factor analysis method for analysis,and combines the silent spiral theory to get the relevant prevention suggestions.