Case Study On Xin Tai Electric IPO Financial Fraud

As the reformation and development of China's economic system, capital market arises at the historic moment. Capital market is not only a barometer of a country's macroeconomic, but also can be the key to solve the problem of unequal and liquidity capital supply and demand. It has a pivotal role on the economic operation. With the rapid development of capital market, the number of listed companies in our country is increasing. However, the consequent problems are becoming more and more.The most serious problem is IPO financial fraud.Xin Tai Electric is the typical cases of IPO financial fraud. Xin Tai Electric listed on the gem in January 2014. On July 8, 2016 Xin Tai Electric started compulsory delisting procedures by the securities and futures commission for IPO financial fraud. It became the first stock which was forced to exit the stock market in the listed companies of our country because of fraud issue. This article attempts to cause people to the attention of the quality of information disclosure of listed companies through the analysis of the Xin Tai Electric financial fraud.Firstly,the article expounds the research background, research purpose and significance as well as research methods and main content; Secondly, the article introduces the basic situation of Xin Tai Electric, describes the whole process of financial fraud; Once again, the article elaborates the related theory knowledge and analyzes the financial fraud means of Xin Tai Electric. Finally, the article analyzes the reasons of Xin Tai Electric financial fraud and put forward the enlightenment.The imperfect capital market system of China,enterprise non-existing of internal control system ,the local government's poor regulation, as well as Intermediaries of serious dereliction of duty, intertwined with a variety of reasons, cause the financial fraud of Xin Tai Electric. Financial fraud severely weaken the role of the market in resource allocation, cost accounting information authenticity and integrity and blow to the confidence of investors in securities market. The listed company financial fraud case must be punished severely, only by this way can we ensure the smooth running of the capital markets.