Case Analysis Of Financial Fraud In Fushun Special Steel Based On Risk Factors

Financial fraud has always been a persistent disease that has disturbed the benign development of China's capital market.In recent years,financial fraud means are more diverse,and the way of fraud is more and more hidden,which attracts market attention.Financial fraud has caused huge losses to the interests of the country and the people,strongly impacted the healthy development of the capital market,not only made investors suffer huge losses,but also misled the market and led to the reverse allocation of resources,seriously hindering the development of the securities market.Although the research on financial fraud has never been interrupted,the domestic research mainly focuses on the field of identification in order to identify and then govern,but the effect is not ideal.In the face of the increasing financial fraud,this paper believes that the financial fraud will be effectively managed by transforming the post governance into prior control.Fushun Special Steel,as the benchmark of state-owned enterprises,special steel industry and mixed ownership reform,is representative to some extent.Based on the brief introduction of relevant concepts and theories,this paper describes the cases in detail,and expounds the fraud means one by one.According to the most comprehensive financial fraud risk factor theory,it systematically analyzes the fraud of various risk factors in Fushun Special Steel.Based on the relevant financial data,this paper analyzes the economic consequences of fraud.The results show that: first,the means of financial fraud in Fushun Special Steel is to increase inventory,construction in progress and fixed assets,false depreciation and less main business cost,so as to achieve the purpose of increasing profit.Secondly,the risk factors of financial fraud in Fushun Special Steel are as follows: operating pressure,delisting pressure and financing pressure are the purpose and motivation of fraud;the moral distortion of senior managers and the lack of positive moral incentive mechanism of the company become the moral quality factors of fraud;the failure of internal control and supervision mechanism,the poor communication of information and the corporate culture that only pays attention to performance provide fraud Opportunities;the company's internal "one word" and weak external supervision greatly reduce the possibility of fraud detection;the lack of deterrent force and low cost of fraud provide a shield for the implementation of financial fraud.Third,financial fraud in Fushun Special Steel has caused serious consequences,resulting in a crisis of trust for investors,cracking down on confidence in the capital market,causing huge losses to small and medium-sized investors,creditors,enterprise employees,upstream and downstream businesses,etc.with the aggravation of fraud,all aspects of Fushun Special Steel's operating capacity have declined rapidly,and its solvency and operating profitability have gradually deteriorated.The paper thinks that the legal problems of financial fraud governance in China are very prominent,based on my professional characteristics,this paper puts forward some suggestions from the aspects of legislation,litigation process and the establishment of compensation mechanism for small and medium-sized investors,in order to provide some reference for the prevention and governance of financial fraud in Listed Companies in theory and practice.