Research On Financial Fraud Of Shanghai Material Trading Company

With the development of industry,scale expansion of company,financial fraud problems are more and more serious,which not only damage economic interests of general investors,but also hold back the development of social economy.For investors,government or other participants,financial fraud problems are not only financial losses but serious trust crisis which can already have a significant impact on socioeconomic development.However,financial fraud management requires solving immediately now is an extremely intricate and formidable problem involving many aspects.Through the case study on financial fraud of Shanghai Material Trading Company,this article will analyze its motivation and methods,hoping to find out governance fundamentally.The article tries to give governance advice on company financial fraud with three aspects.The task can be communicated in company's own management,intermediary management and regulator management.Firstly,company's own management,including strengthening construction of governance structure,promoting internal surveillance system.However,only external binding is not enough,risk consciousness and professional ethics of accounting staff are indispensable.Secondly,intermediary management,which can strengthen troop construction of CPA and improve auditing quality in auditing members;accelerate transformation of accounting firms;try to launch insurance system to spread audit risk of intermediaries.Thirdly,regulator management,which can consider to perfect the legal environment,reinforce the supervision;increase punishment on financial fraud and their violation cost,hold joint liability of intermediaries.In this way,intermediaries will consider greater economic cost when giving up its independence.