A Case Study Of Fushun Special Steel Shares Co.,ltd.financial Fraud Based On The Perspective Of Internal Control

With the rapid development of information technology,the high efficiency of information transmission and the transparency of the company’s production and operation should make it more and more difficult for listed companies to carry out financial fraud.However,in recent years,financial fraud cases are still emerging in an endless stream,such as Shandong new green,geeya technology,Kunming Machine Tool and Fushun Special Steel Shares Co.,Ltd.,which this paper is to study in depth.Through a series of means,the listed companies achieve the purpose of increasing profits falsely,so as to turn losses into profits,convey false information to the outside world,damage the interests of investors,and harm the whole stock market.Through the study of these cases,this paper finds that the rapid development of information technology not only brings opportunities to enterprises,but also brings severe challenges.Due to the transparency of information,the ownership structure and institutional setting of listed companies can make external information users clear at a glance.The apparent legal compliance and even excellent internal control system of the company make investors full of confidence in the listed company.The efficiency of information transmission enables external information users to quickly receive relevant announcements of listed companies,such as resolutions of the board of directors,reports of independent directors,resolutions of the board of supervisors,audit reports of audit institutions,etc.Investors believe that in this environment,listed companies will not take the risk of financial fraud.However,on the contrary,some listed companies that have lost their corporate culture,under the leadership of the unethical management,cover up the hidden financial fraud through formal legal compliance,and the publicly disclosed information has become a bright coat to cover up the evil.In this paper,Fushun Special Steel Shares Co.,Ltd.financial fraud case is selected as the research object.The company conducted financial fraud for nearly eight years in September 2010-2017,and was formally punished by the CSRC on December 12,2019.This case is very rare in today’s market environment because of its long duration,huge amount and bad means.From the perspective of the five elements of internal control,this paper analyzes the problems in the internal control of Fushun Special Steel Shares Co.,Ltd.behind the case.It is found that in the internal control system of Fushun Special Steel Shares Co.,Ltd.,the corporate culture and integrity spirit are missing,the risk assessment process is difficult to promote,the internal and external communication is invalid,and the supervision function is not fully played.In view of these control defects,this paper proposes a series of improvement measures.If the listed companies can build a set of interconnected internal control system that can play a role,it will undoubtedly minimize the risk of financial fraud.