Internal Control And Financial Fraud

The capital market of our country is from an emerging market to a mature market, but because of China’s capital market started late, corporate governance and market supervision and many other aspects need continuous improvement, financial fraud still repeated.In 2013, the SFC made severe administrative punishment to the financial frauds of the companies of Guangdong Xindadi, Shanxi days to new science and technology, Hunan Wanfu biotechnology, Yunnan Greenland and to the relevant responsible person, aims to purify the abuses of the capital market, protect the interests of investors, rebuild a good confidence in the market, to promote stable and healthy development of capital market.The main subject of financial fraud, such as listing Corporation, in order to gain an unfair economic interests, take a false illegal statement on financial facts deliberately which is of importance and substantial.With the frequent Hongguang, Yinguangxia, qiongminyuan, financial fraud occurred, internal control theory has been widely developed in China,Internal control is carried out by the enterprise board of directors, board of supervisors, managers and employees,thus "as the operating efficiency, reliability of financial reporting, compliance related laws the goal of a process to provide reasonable assurance".Financial fraud prevention is always the basic functions of internal control, internal control as a protection system, its effectiveness and financial fraud prevention has strong correlation,Good internal control system can effectively reduce the probability of the risk of wrong and fraud and weakened the consequences of financial fraud, ensure the assets safety and sustainable development of the enterprise. Based on this, this article embarks from the enterprise actual financial fraud case, pay more attention on the research of internal control of the financial fraud enterprise, in order to specific issues specific analysis, proposed the feasible to prevent the internal control system for fraud, promote the healthy and orderly development of the enterprise.In this paper, by using the theory and research methods of case analysis, to study the theory of knowledge apply to practice.First of all, in recent years at home and abroad on the study of the relationship between internal control and financial fraud has carried on the science of investigation;Secondly, according to the development of internal control theory, summarizes the theory and the basic framework of the internal control, combs the relevant theories of financial fraud at the same time, states the financial fraud motivation theory in detail;And then introduced the Hunan Wanfu biotechnology financial fraud case, carries on the detailed analysis to the whole case, from the perspective of the five elements of internal control to identify vulnerabilities that exist;Finally, On the basis of the case that company internal control is weak, execution does not reach the designated position, put forward to develop the appropriate internal control and the effective implementation of improvement measures, real help prevent fraud, protect the interests of enterprises and investors.