| Financial fraud has always been an important issue disturbing accounting field and massive investors. With the development of capital market, financial fraud has become worse and worse instead of being relived. Then, it can only be effectively restrained by finding motivations and methods from the origins. In the paper, it tries to discuss the effect of internal control structure and external control mechanism on financial fraud from the perspective of company control.First, the paper gives detailed discussion on related literature documents home and abroad, and on the basis, it researches on the relationship between company control and financial fraud by employing theoretical analysis, putting forward the effect of external control mechanism and the internal control structure on financial fraud. The external control mechanism includes investors, banks, government, and medium institutes, etc; while internal control structure includes shareholders, board of directors, regulatory commission and manager level.In terms of case study, the paper takes the exposed large-sized fraud case of Nanfang Textile Co., Ltd in May 2014 as an example. It gives analysis on their fraud motivation, fraud means and fraud features specifically, during which we find that occurrence and development of Nanfang fraud event all originated from problems of company control.According to the research result, under the background of current systematic environment and capitalist market in our country, internal and external factors, such as ownership concentration, features of board of directors and regulatory commission, CEO independence, legal environment, government functions and medium institutes have all had effects on financial fraud to different extents. At last, the paper proposes some policy suggestions to perfect enterprises’ self control, strengthen medium institutes’ standard, improve government administrative level as well as enhance social supervision and so on. |
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