A Survey On Financial Fraud Issue Of Listed Corporation

In 1930 s, the economic crisis in the United States confirm that the true extent of financial information is necessary to ensure the healthy development of the securities market. Since the end of 2014, China's stock market ushered in a bull market, which has been popular in Chinese enterprises. Stock market can reflect the economic conditions of a country or region. If listed companies provide false information, it will harm the interests of investors, creditors, triggered the stock market, resulting in an unstable economy, against the long-term development of China's securities market. IPO financial fraud would jeopardize the effective operation of the securities market and the rational allocation of social resources. In recent years, “ShengJing”? “WanFu” and “ZhangZidao” events had caused a very bad influence. In order to achieve a successful listing, listed companies used its own characteristics and finally affected the capital market and the interests of investors. Securities market regulation is very important to the development of the securities market. It can effectively restrain the securities market, protect the legitimate interests of investors and ensure a transparent securities market.This paper aims to analyze the “XinDadi” IPO financial fraud case to study how to deal with the company IPO financial fraud, reduce audit failure, reduce the damage on stock market from the root, regulate the financial behavior of listed companies, protect the interests of investors and promote the healthy development of the securities market. Through the case study method, the author analyzed the “XinDadi” IPO financial fraud incident. There are five parts in this paper. The first part introduces the background, significance, methods, innovation and deficiencies. The second part summarizes the motivation?characteristics and methods of the IPO fraud. The third part analyzes the “XinDadi”, the first step is to identify the fraud of the company, next step is to analyzes the causes and methods of company fraud, the last step is to find our the reasons of audit failure. The forth part makes some suggestions to regulatory authority. The last part is the conclusion of this paper. The author believes that company IPO fraud is associated with the agency. When we want to improve capital market environment, we should restrict the relationship between the company and the agency. The cooperation between agency and the sponsor also should be limited. There are three aspects in how to improve companies IPO fraud, the company itseld, external audit and regulatory agencies. First, reducing the company's motivation of fraud. Second, strengthening auditing to listed companies and supervising company's financial from the outside. Third, commission should dilute the company's profit when assessing the conditions of listed company, more emphasis on the disclosure of corporate information and improve laws and regulations of the IPO which will reduce legal loopholes.