A Survey On Financial Fraud Issue Of Listed Corporation

In China’s capital marker, from A-share market to small and mid enterprise or growth enterprises market, the debate on the issue of financial fraud has never been interrupted. The financial information of listed companies that has been disclosed is important to investors when they make the investment decision. The quality of financial information affects investors’ decision. When investors began to realize the important of the financial information and pay special attention to it, the listed company financial fraud events begin to occur frequently in the securities market in China. Early years, to the LanTian, Yinguangxia, incident early years, to the ZiXin, XinDadi, WanFu biotechnology, last years happened ZhangZidao and other fraud incident. In order to ensure the economic interests of the big shareholders and management, some of the listed companies use diverse means of financial fraud. So that investors lose confidence to regulatory authorities, disappointed with auditors and the enthusiasm of investors be combated.The object of financial fraud is to enclose money by providing fraud financial reports to mislead the investors to make the wrong decision. Not only cannot really reflect the enterprise’s performance, but also block the healthy development of capital market. How to maintain the stability of the capital market, protect the interests of investors, detect and prevent financial fraud of listed companies occur frequently is imperative.In this paper, I choose the method of normative research, literature research and case research and select a financial fraud failure case of XinDadi Biotechnology Co., Ltd., Guangdong,2012. With multiple aspects of the company’s financial fraud methods and reasons for in-depth analysis, Including internal governance, external environment and internal and external factors, such as looking for form listed companies of fraud. And then analyze the motivation of the financial fraud and the reason why audits failed to detect the fraud.On the behavior and characteristics of financial reporting fraud has carried on the analysis from all aspects. Ultimately, give some suggestions, for auditors, how to avoid failure of the financial fraud; for listed companies, how to prevent the financial fraud by internal control; for external regulatory agencies, how to avoid and govern financial fraud. In order to provide some help to contain the phenomenon of financial fraud in listed companies.