Research On Financial Fraud Of Limited By Share LTD In Shen Xian Yuan

Financial fraud has always been a major problem in the capital market.The past financial fraud has basically appeared in the main board market,and agricultural enterprises are the high incidence area of financial fraud.However,with the expansion of the National Equities Exchange and Quotations(NEEQ)in 2013,the scale of listed company expanded rapidly,and the large number of listed company increased.Some of the poor quality companies were mixed into the NEEQ.In the NEEQ listed agricultural enterprises,because of the unique market environment of the NEEQ and the characteristics of the agriculture industry,it makes it easy to produce financial fraud.In July 2016,the NEEQ listed agricultural company Shen Xian Yuan ginseng Limited by Share Ltd(hereinafter referred to as "Shen Xian yuan")was found to be financially fraudulent and became the first case of financial fraud in the NEEQ,which caused huge repercussions in the capital market.In this paper,literature research,case analysis and comparative analysis are used to discuss the problems of financial fraud in the first case of the NEEQ financial frauds-the financial fraud of the Shen Xian source Limited by Share Ltd,and find the means and motivation of the fraud,and analyze the impact of the fraud on the business operation.Suggestions on preventing financial fraud of new three board listed agricultural enterprises are put forward.This paper first summarizes the current situation of the NEEQ,summarizes the financial frauds of the agricultural enterprises in the capital market for 1999-2016 years,and finds that the most common means of financial fraud are the virtual increase of assets,the income of the virtual increase of the main business,the fictional exchange and the related transactions.The reasons for the common fraud of the agricultural enterprises are summarized as follows:the internal motivation of the enterprise is: the "one share" ownership structure;the lack of high-quality talents;the internal governance is not perfect.The external motivation of the enterprise is that the verification of biological assets is difficult;the cost and tax cost of fraud are low;it is easily affected by natural disasters;the transaction objects are scattered;the punishment of fraud is lighter.Then,this paper takes Shen Xian yuan as a case to analyze its financial frauds.It mainly adopts the following two methods:First,the use of fictitious tendencies to support the adoption of the tendering costs for the outsourcing of wild ginseng as the ginseng of the wild gems was sold to related parties.The sale was not purchased after the sale.The costs are carried forward,but are included in the production of biological assets,and ultimately make the profits inflated;Second,the unit price of wild ginseng sold to related parties is much higher than its acquisition costs,the unfair price leads to inflated profits.This paper analyzes the causes of financial fraud from the inside and outside of the company based on the fraud risk factor theory.The internal motivations are: high financing demand,blind development of the company,failure of internal corporate control,and low moral quality of senior management and financial personnel.Etc.;external motivation analysis is based on general risk factors of the fraud risk factor theory,mainly in the following aspects: the characteristics of the agricultural industry provide opportunities for fraud,inherent defects of the new three board,external supervision unfavorably reduces the probability of financial fraud is found,financial fraud Less penalized,etc.The finance fraud of Shen Xian Yuan will have a greater impact on the company.This paper analyzes the impact of financial fraud on corporate finances,and selects the corresponding financial indicators from the company's operating capacity,debt repayment ability,profitability,and development.Four aspects of ability to analyze the impact of financial fraud on its operations.Through analysis,it was found that in general,Shen Xian Yuan's capabilities improved in the year after the financial fraud,but its financial capabilities significantly decreased after the financial fraud was exposed and punished by the CSRC.Finally,according to the analysis of the previous section,the suggestions for preventing the financial fraud of the listed agricultural enterprises in the NEEQ were proposed from the aspects of perfecting the internal control of the enterprise and strengthening the external supervision.The internal suggestions are: regular professional ethics education;encourage internal reporting;improve the ownership structure of the enterprise;Establish an independent director system.The external recommendations are: to strengthen the liquidity of the new NEEQ;to expand the financing channels for listed agricultural companies;to improve the disclosure system of biological assets;to stagger the disclosure time of listed companies and listed companies;to use foreign experience to improve the system of auditing appointments in the NEEQ;Set up a special agricultural inspection team;increase the rewards and punishments for listed companies and intermediary agencies.