Research On Financial Fraud And Governance Of K Company

With the vigorous development of China’s economy,the capital market has grown rapidly.As the core component,the listed companies’ number in the securities market is also increasing.However,with the rapid development,problems also emerge one after another.For example,the dishonesty of listed companies such as financial fraud is becoming more and more serious.The means of financial fraud are becoming complex and hidden than before,and the frequency of occurrence is getting higher and higher.The financial fraud problems not only seriously disrupted the normal operation of the capital market,but also brought huge economic losses to many investors,causing the society to fall into a large-scale trust crisis.Therefore,we should attach great importance to the governance of financial fraud.This paper selects the classic fraud case of K Company,the "white horse" in the A-share market,and based on the theory of fraud risk factors,makes an in-depth analysis of five aspects of the fraudsters’ moral character,fraud motivation,fraud opportunities,the probability of fraud being found,and the nature and process of punishment after fraud is found.By analyzing and studying the specific causes of K Company’s financial fraud,the corresponding regulatory governance countermeasures are proposed.The final study found that the reasons for fraud in listed companies include not only poor moral quality of managers,debt pressure,operational pressure,internal governance factors driven by high-level interests,but also external environmental factors such as lax external auditing,lagging regulatory efficiency,and relatively low illegal costs.Therefore,it is recommended to strengthen the moral construction of relevant personnel within the enterprise and implement effective internal control management.Externally,measures such as strengthening the independent management of audit institutions,strengthening the construction of laws and regulations,and implementing penalties,improving regulatory efficiency,and improving the disclosure and reporting system are taken to address both internal and external issues,jointly on preventing and managing financial fraud,and creating a healthy and stable capital market environment.