Research On Financial Fraud Of Merger And Acquisition Target Of Public Company

China’s capital market has grown from scratch and has achieved fruitful results in its development over the past 30 years since its establishment.At the same time,with the comprehensive implementation of the registration system reform,the subjects involved in the capital market are also unprecedentedly complex,and various fraudulent behaviors of enterprises are becoming increasingly covert.The difficulty of supervision is also increasing,and mergers and acquisitions of listed companies have become a weak link in regulatory review.Due to the loose regulation of mergers and acquisitions,the target company often presents the "three highs" characteristics of high premium,high valuation,and high goodwill in the mergers and acquisitions of listed companies.The financial performance and growth of the acquired party before the merger and acquisition are the basis of the valuation of the merger and acquisition target,which increases the risk of financial fraud in the early stage of the merger and acquisition.At the same time,due to the formation of high goodwill on the basis of overestimation,the target company is often motivated to engage in financial fraud in order to fulfill its performance commitments after the merger,resulting in financial fraud behavior.The subsequent large impairment of goodwill and sharp drop in stock prices caused by such financial fraud will directly affect secondary market investors,which can easily have a very adverse impact on the healthy development of the capital market and harm the interests of listed companies and investors.In the context of the comprehensive registration system and the amendment of the Securities Law,how to prevent and govern financial fraud in the target company of mergers and acquisitions of listed companies has become an urgent problem that needs to be solved.Therefore,the study of financial fraud in the target company of mergers and acquisitions by listed companies is of great significance for promoting comprehensive registration system reform,preventing fraudulent issuance and passing the exam,regulating the market regulatory environment,and guiding practicing intermediaries to practice correctly.This thesis mainly studies various issues related to the financial fraud of the subject matter of mergers and acquisitions of listed companies in the process of mergers and acquisitions,and combines the background of the current registration system reform,analyzes the typical case of Kangni Electromechanical M&A of Longxin Technology,and analyzes the action mechanism and behavior of various subjects involved in the market.On the basis of case analysis in practice,it uses relevant theoretical knowledge to explain theoretically,In this way,the motivation,identification and means of financial fraud of listed companies’ M&A targets are systematically studied,and corresponding governance suggestions are put forward for various problems,so as to achieve a more effective response to financial fraud of M&A targets.This thesis is mainly divided into five parts.The first part of the article first discusses the background,content,methods and significance of the research,briefly reviews the research achievements of domestic and foreign scholars on financial fraud,and briefly explains the research framework of this thesis.The second part deeply analyzes the relevant concepts and characteristics of listed companies’ M&A,audit methods,financial fraud motivation,financial fraud motivation,and the main ways of financial fraud.The third part briefly describes the basic situation of Kangni Electromechanical and Longxin Technology,the main process of Kangni Electromechanical M&A of Longxin Technology,the basic introduction of the case,and the whole process of the event and the punishment.Chapter IV makes a more in-depth summary and review of the case itself,explores the causes,signs,means and results of financial fraud in the process of Kangni Electromechanical M&A of Longxin Technology,analyzes the inadequacy of the work of intermediaries and audit organizations,and points out the internal and external conditions for the formation of financial fraud in the merger and acquisition of listed companies,This thesis discusses the consequences and adverse effects of financial fraud in mergers and acquisitions of listed companies.The fifth part elaborates the research conclusions obtained in this project activity,and proposes a series of governance measures from the intermediary,internal governance,regulatory system,punishment standards and other aspects for the financial fraud problem of listed companies’ M&A.