Research On The Causes And Countermeasures Of ST Kangde's Financial Fraud From The Perspective Of Internal Control

Due to the frequent occurrence of financial frauds in China’s securities market,frauds such as hidden related party transactions have gradually become tools for fraudsters to seek profit because of their complexity and concealment,seriously damaging the interests of investors and companies,and causing great harm to the capital market.Big shock.How to restrain the occurrence of fraud from the source and minimize the loss of investors is a problem that urgently needs to be resolved to strengthen the confidence of the masses in the capital market.With the occurrence of multiple cases of vicious financial fraud,experts at home and abroad have paid more attention to the construction of internal control related systems.my country’s "Basic Standards for Internal Control of Enterprises" also clearly requires enterprises to improve their internal control systems and establish anti-fraud mechanisms.Using the CSMAR database,33 financial frauds occurred in the Shanghai-Shenzhen sector from 2016 to 2019.Among them,financial fraud companies with internal control defects accounted for 90.9%,and there were 10 major internal control defects.At the same time,although my country’s listed companies voluntarily provide external control self-assessment and special reports,behind the effective evaluation results of internal control reports,they still conceal bad fraud.Therefore,a typical case is selected to analyze the correlation mechanism between internal control and the cause of financial fraud from the perspective of internal control.It is of certain research significance to propose specific countermeasures to prevent and control financial fraud from the perspective of internal control.The issues studied in this article are: what path does internal control affect the occurrence of financial fraud,and from the perspective of internal control,put forward relevant suggestions to improve internal control to prevent financial fraud.This article uses the case analysis method and literature research method,based on the perspective of internal control,with the five elements of control environment,risk assessment,control activities,information communication,and internal supervision as the starting point,combing the literature review,using the principal-agent theory,COSO internal control integration model The four-factor theory of fraud is the theoretical support to build an analysis framework of the causes of financial fraud from the perspective of internal control.Based on the theoretical analysis framework,the specific path of ST Kangde’sinternal control deficiencies affecting the occurrence of financial fraud is analyzed,and finally suggestions are made to improve internal control and implement anti-fraud prevention.This article concludes that the failure to effectively design and implement anti-fraud control links in internal control will promote fraud;the imbalance of the internal control environment is the primary condition for financial fraud,and the management philosophy and integrity and moral impact of management and actual controllers Whether the internal control anti-fraud mechanism is operating effectively;the risk assessment system is an important link in the design of the anti-fraud mechanism.This system falsely provides a reasonable excuse for ST Kangde’s financial fraud,resulting in the inability to effectively identify and control fraud risks;the failure of control activities is The direct path of financial fraud implementation,the lack of independence and professional ability of internal supervision will weaken the possibility of fraud detection.Finally,based on the perspective of internal control,financial fraud prevention suggestions are proposed.Priority should be given to improving the internal control environment,strengthening the disclosure of risk assessment procedures and accountability,and using scientific and technological means to achieve internal and external information to improve supervision and operational efficiency.