Study On The Financial Fraud Motivation And Governance In IPO Of Companies

The company as a component unit of the national economy, in order to become bigger and stronger, financing by securities markets become an effective channel. IPO(Initial Public Offerings, “IPO”): refers to the joint-stock company’s first time of a Public offering. Enterprises can raise funds, attract investors, liquidity enhancement, improve the visibility and the identity of the employees of enterprises, and improve the enterprise system after IPO. Some companies reach the IPO index by financial fraud, to complete the purpose of financing, fundraising. IPO financial fraud events frequently occurred in recent years, not only brought economic losses to investors, caused adverse impact to society, damaged the orderly and healthy operation of market economy in our country. Exploring the IPO financial fraud motivation and searching for suitable countermeasures to govern company IPO financial fraud, can standardize the whole running environment of the capital market, improve the transparency of companies to disclose financial information and credibility, ensure the reasonable, effective and healthy capital market in China today.This article selects the IPO financial fraud case of Guangdong Xindadi biological technology co., LTD.(hereinafter referred to as the “Guangdong Xindadi “) to study, mainly because the company of Guangdong Xindadi is a typical financial fraud company in the IPO stage in recent years, it is representative in the financial fraud and motivation.This article mainly uses the method of literature material and case study. By summarizing and refining the domestic and foreign related literature about reasons,behaviors and governance of the company’s IPO financial fraud, the paper uses fraud risk factor theory, the signal transmission theory and internal control theory as the foundation of research, select Guangdong Xindadi’s IPO financial fraud as an example, analyzes our country company IPO financial fraud motivation from five aspects of the moral quality, motivation, opportunity, the possibility of Exposing, degree of punishment, put forward the governance strategies of the company IPO financial fraud: strengthen the integrity education of governance and management; improve the mechanism of financial personnel professional ethics continue to education; improve registration system and the delisting system; increase solve the hidden trouble caused by a dominant; improve the effectiveness of the internal audit department; change accounting firms charge mode; promote the practice of certified public accountants ability; set up audit talent pool; extend the sponsors responsible time; increase irregularities cost the company’s board of directors and manager; increase penalties for intermediaries.