Research On The Financial Fraud Case Of KYT

On October 30, 2009, KYT company as one of the first gem listed companies. The GEM is like China version of Nazidake. From the beginning, it shoulders the important responsibility of promoting high speed and effective development of enterprises in China’s economic market. As we all know, in the past seven years the GEM has played an invaluable role on China’s foreign economic and trade business, high-tech development,the survival of small and medium enterprises and the establishment of modern enterprise system. As of early 2016, the total market capitalization of the GEM up to 5.59 trillion yuan, but behind its rapid growth all the way, many people have pointed out that the GEM’s bubble economy mixed with a large number of fraud phenomenon, but also brewing this risk and harm show great concern.In recent years, with the constant improvement of China’s accounting policies,Employees to enhance accounting treatment capabilities, as well as increasing supervision of departments, the existence of financial fraud listed companies frequently exposed. Accounting firm as a listed company connection bond market, it shall timely find and stop the happening of financial behavior. Fraud cases not only make the investors, creditors suffer loss of property, loss of confidence in market supervision, but also cause profound impact on the healthy development of capital markets.In this paper, KYT company with huge amount of money is used as the research object,and the case study is used to investigate the misconduct of the accounting firm responsible for its audit work according to the error correction report given by it. This paper is divided into four parts:The first part summarizes the market and industry background of the fraud case, the research significance, the research content and the research method; the second part of the case by the narrative case,review KYT company financial fraud specific events; the third part of the event based on the company’s financial data and related theoretical basis,standing in the perspective of its audit unit to explore the accounting firm as a result of the existence of forged profits, tampering with financial data, to cover the behavior of shareholders and other false acts, Whether there is an audit fault, misconduct risk,collusion with the trial unit and other acts of loss of regulatory functions; the fourth part of the accounting firm from the perspective of information verification, the quality of audit of listed companies, auditors and other aspects of professional ethics recomendations, and finally extended to the entire CPA industry, in order to change the status of China’s audit institutions to put forward relevant measures.