Research On The Impactive Effect Of Large Shareholders’ Occupation And The Continuity Of Fraud In Listed Companies

The institutionalization of A share market has been continuously strengthened and the degree of legalization has been deepened,but financial fraud and fraud of listed companies are still emerging.In 2019,*ST Kangde’s financial fraud scandal broke out.The major shareholder of the company used cash management services and other embezzlement methods to embezzle the listed company’s monetary funds of 12.2 billion yuan.For four consecutive years of financial fraud,the total false increase in profits was 11.9 billion.The amount involved in the case broke through historical records.In recent years,quite a lot of horrific major fraud cases had been occured in the capital market.Listed companies’ financial frauds have shown continuity characteristics,that is,continuous financial frauds in multiple fiscal years,false statements,misleading records,and major omissions.Means no longer exist in isolated fiscal years,but appear continuously in multiple fiscal years.As one of the company’s owners,the large shareholder of the listed company,because of its large shareholding ratio and deep participation in the company’s daily operations,has significant influence and decisiveness on the company’s daily operations and major decisions.Therefore,in financial fraud cases,Large shareholders usually blame.Existing research has found that large shareholder embezzlement and internal control have a obvious impact with the company’s financial statement.After the embezzlement,in order to maintain good financial performance,large shareholders tend to conduct financial fraud.Based on this,the behavior of embezzlement by large shareholders often becomes an important factor in spurring listed companies to move toward financial fraud.There is great importance to analyze the multi-year financial fraud of listed companies under the background of embezzlement by large shareholders and to analyze the joint effect of the two.Given the discussion above,the central questions in this survey are: Long-term impact of public equity embezzlement by major shareholders and continued financial fraud by listed companies,situation of invasion of assets by major shareholders? Also,listed company resources,technical tools and institutional arrangements that major shareholders are using to achieve ongoing financial fraud over multiple fiscal years,and what kind of counter-effects do years of financial fraud have on the shareholder’s encroachment?Through the application of GONE theory and other theories for analysis,this article believes that in the early stages of embezzlement behavior,the embezzlement behavior needs the cover of financial fraud.The embezzlement of the majority shareholder ultimately needs to be covered by accounting processing and adjustment of the financial statements,so the embezzlement itself has objectively become the most direct driving force for financial fraud.In the context of the embezzlement of the major shareholder,the most direct financial fraud The goal is not to artificially increase profits and increase share prices,but to cover up the embezzlement of major shareholders.The persistence of embezzlement determines the continuity of financial fraud.Generally speaking,the embezzlement of listed companies by large shareholders is difficult to occur in an accounting period in isolation,but it is characterized by continuity.On the premise that the embezzlement behavior is not eliminated,the financial fraud as its cover-up method cannot be eliminated.When embezzlement begins,companies need to cover up through financial fraud,and if the existing embezzlement fails to be effectively eliminated,the financial fraud implemented as a cover will continue.But when the financial fraud reaches a certain level,the embezzlement behavior is difficult to cover up,and the disclosure of the financial fraud behavior eventually leads to the disclosure of the embezzlement behavior.