Research On IPO Financial Fraud Of Small And Medium-Sized Enterprises

The establishment and development of the security market has brought opportunities to small and medium-sized enterprises.More and more small and medium-sized enterprises can do Initial Public Offerings to raise funds and obtain development funds with the development of the security market.However,as more and more enterprises rush to list in the stock market,there are also some problems in the stock market.Some companies make financial fraud to maintain high stock prices after a successful listing,and others make financial fraud for the IPO.Some of the proposed IPO companies whitewashed their financial data and passed regulatory review.But under the supervision of the public and social media,the fraud was finally detected and stopped by the regulatory authorities.In recent years,the CSRC has also disclosed some typical IPO financial fraud enterprises.For example,the huge amount of counterfeiting and the most influential agricultural listed companies were Wanfushengke,Green Land and the New Land that financial fraud was disclosed by the media on the eve of listing and stopped on the gem,There is also Xintai Electric,which was forced to delist because of fraudulent issuance.By analyzing the financial fraud of various enterprises,it can be found that the relationship between corporate IPO financial fraud and audit failure and the drawbacks of the listing system of small and medium-sized enterprises in our country.The financial fraud of IPO not only has a serious impact on the development of enterprises,but also seriously disturbs the operation order of the capital market.Effective prevention of IPO financial fraud,could protect the interests of investors,especially the interests of small and medium investors.It is imminent in promoting the healthy development of China's security market.This paper first analyzes the characteristics of IPO financial fraud in small and medium-sized enterprises and concludes that the means of financial fraud which are mainly to increase income and assets,adjust cost expenses,conceal related parties and related party transactions and inadequate disclosure of information etc.Then I applyfraud triangle theory to analyze the case of gem Jiayu shares and the small and medium-sized board Dengyun shares.The main reasons for financial fraud are urgent financing demand,fierce market competition,failure of internal governance mechanism of enterprises,inaction of intermediary organizations and low cost of fraud.On this basis,the measures to prevent IPO financial fraud in small and medium-sized enterprises are put forward.The specific countermeasures are as follows: the government should explore new financing ways to broaden the financing channels for small and medium-sized enterprises;the enterprises should strengthen the internal control of enterprises and improve the corporate governance environment;the intermediary organizations should strengthen IPO verification,deepen the professional ethics of examiners;develop the regulatory mechanism,improve the relevant laws and regulations,so as to create a good investment environment for the majority of investors.