Case Study On Selen Science&Technology Financial Fraud Based On GONE Theory

The rapid development of the capital market and the continuous improvement of related institutional systems have improved the efficiency of resource allocation in the market,promoted the advancement and development of my country’s economy,and gradually shortened the gap between my country and developed countries.My country’s listed companies have gradually increased,but what is worrying is that the phenomenon of financial fraud in listed companies has gradually emerged.The fundamental problem of financial fraud is difficult to effectively solve,making financial fraud more serious.My country not only needs to pay attention to the speed of development but also the quality of development.In order to continuously improve the quality of capital market development,we can effectively identify the means of financial fraud and explore the causes of financial fraud,so as to provide suggestions and enlightenments to the existing common problems of listed companies.Selen Science&Technology has committed financial frauds for three consecutive years from 2016 to 2018.Generally speaking,the amount of financial frauds of Selen Science&Technology is relatively large,the means are difficult to identify,and the punishment is relatively large.The specific methods of financial fraud are as follows:In 2016 During 2018,Selen Science&Technology used its wholly-owned subsidiaries to falsely establish business transactions with many companies controlled by Mr.Zhang,achieving the purpose of falsely increasing revenue,costs and profits;In 2017 and 2018,Xinlun Technology did not disclose specific information about the related relationship and related transactions with Honghui Electronics in the financial report at the end of the year;in 2017,Selen Science&Technology did not specify the specific conditions related to the company’s guarantees in the financial report at the end of the year.After Selen Science&Technology was suspected of financial fraud,the China Securities Regulatory Commission and other regulatory agencies filed an investigation into the incident.As a result,Selen Science&Technology was warned and punished and required to pay a fine of 600,000 yuan.For the directors of the management and management of Selen Science&Technology,there are a total of 19 people including the chief,general manager and chief financial officer being fined1.17 million yuan.This article uses GONE theory as a research tool to analyze the causes of financial fraud in Selen Science&Technology,and explain that the four factors of GONE theory are the fundamental causes of financial fraud.The management’s greed for personal development and major shareholders’ greed for material wealth constitute the greed factor of Selen Science&Technology’s financial fraud.The imperfect internal control system,imperfect governance structure,failure of intermediary agencies to perform due diligence and unqualified internal supervision constitute the cause of Selen Science&Technology’s financial fraud.Opportunity factors,business financing,maintenance of listing status and beautification of financial statements constitute the necessary factors for Selen Science&Technology’s financial fraud.The difficulty in identifying financial fraud methods and the low cost of financial fraud exposure constitute the exposure factors of Selen Selen Science&Technology’s financial fraud.Based on the analysis of the financial fraud cases of Selen Science&Technology,this article puts forward the following suggestions: cultivate a healthy corporate culture,improve the moral standards and legal awareness of the management and governance,reduce the greedy psychology of the management and governance;improve the company’s internal governance system,reduce the internal opportunities of the company’s financial fraud;improve the role of internal and external supervision mechanisms,strengthen the supervision mechanism of the internal audit department,and strictly assess the professional knowledge and work capabilities of auditors to reduce the company’s financial fraud opportunities;penalties for financial fraud The efforts were further improved to reduce the company’s motivation for financial fraud.