A Study On Agricultural Enterprises Financial Fraud

Recently,as China's capital market operating gradually improved,more and more companies are eager to join the capital market,especially the large number of SMEs,listing in the capital market is an important way for company's development.China,as a traditional agricultural country,vigorously promoting agricultural modernization is very important for China's future economic development.The development of the agricultural industry is inseparable from the leadership of agricultural enterprises.More and more agricultural enterprises are also start involved in the capital market.In China,most agricultural enterprises are small and medium-sized enterprises,and SMEs contribute more than 60% of GDP to China's economy.However,due to its poor foundation and the low net profit,it's difficult for the agricultural enterprises to gain the favor of investors.In 2012,the National Small and Medium-sized Enterprise Transfer System Co.,Ltd.(NEED)officially began operations,more and more small and medium-sized enterprises,especially agricultural enterprises,also chose to list on the New OTC for financing.It is well known that the quality of companies in the capital market directly determines the prospects for the development of the capital market.However,there are many companies in the current capital market that do not meet the conditions for listing the market.through the use of whitewashed financial statements before issuing shares.Fictitious related party transactions are eligible to enter the market,and they will be exposed shortly after entering the market.This will not only infringe on the interests of the general public,but also seriously affect the health and development of China's capital market and waste the scarce capital resource.From what we now know as financial fraud cases in Wanfusheng,Zhangzidao,and Greenland,the small numbers of agricultural companies are frequently involved in the financial fraud,which really worth our reflection.Therefore,the study of various problems in the process of agricultural companies entering the capital market will help the simultaneous development of China's agricultural real economy and virtual economy.S Co.,Ltd.is an agricultural company which listed on the New OTC in 2014 and was punished by the China Securities Regulatory Commission in 2016,becoming the first case of financial fraud of the New OTC.In this paper,through the combination of theoretical analysis and case analysis,the financial fraud three-factor theory is used to analyze the S Co.,Ltd.,focusing on the analysis of its financial fraud methods.The company's counterfeiting methods mainly include profit manipulation through biological assets;through fictional transactions.The agreement weighs down the cost and fictitious business income through the fictitious related party trade,and then summed up the commonly used means of the agricultural company financial fraud,and targeted governance recommendations.Recommendations are divided into: improve the information disclosure mechanism,increase corporate financial fraud costs,standardize the corporate governance structure and the quality of accountants,adjust the auditing standards of agricultural enterprises and regulate the duties of the host brokers.It is hoped that through the analysis of this paper,it can provide a basis for the regulatory authorities to rectify agricultural enterprises,especially the agricultural enterprises.In order to promote the healthy development of China's capital market and the overall innovation of the agricultural industry.