A Case Study On Financial Fraud Of Jiangsu Yabaite Technology Co.,Ltd.

At present,with the continuous promotion of the “Belt and Road Initiative”,more and more enterprises are expanding their business overseas.Although this has provided new growth opportunities for China's economy,it has also brought unprecedented challenges to China's regulatory system for listed companies.In the past two years,the CSRC has penalized two companies involved in cross-border financial fraud in Jiangsu Yabaite and Erkang Pharmaceutical.In the context of globalization in the future,there will be more and more foreign-related businesses of listed companies.Therefore,it has great practical significance for how to prevent cross-border financial fraud behaviors.At the same time,the relevant recommendations obtained through research have certain guiding significance for some companies with only domestic business.After reviewing and combing the relevant literature on financial fraud,this paper uses the most comprehensive theory of the driving force of fraud,the fraud risk factor theory,to study the causes and means of the fraud of Jiangsu Yabaite.Finally,combined with the case of Yabaite financial fraud to make corresponding recommendations for preventing cross-border financial fraud cases.Jiangsu Yabaite is the first listed company to be punished for cross-border financial fraud.On December 15,2017,the China Securities Regulatory Commission announced the decision on administrative penalties for Yabaite,stating that during the period from 2015 to September 2016,Yabaite inflated the operating income of 581,140,100 yuan and inflated the profit of 256,501,100 yuan.Fraudulent means include fictional overseas engineering projects,virtual construction materials export trade,and fictional domestic building materials trade.Subsequently,the CSRC will transfer the suspected securities crimes of Yabaite and related personnel to the public security organs to pursue criminal responsibility according to law.The independent financial advisory agency of the company,Jinyuan Securities,and the auditor Zhonghua Certified Public Accountants,allegedly issued documents containing false contents will be seriously dealt with by the CSRC.At present,the Shenzhen Stock Exchange officially launched the mandatory delisting procedure for Yabaite.If Yabaite is finally delisted,it will become the first delisting company for the SME board in Shenzhen.Therefore,the case of Jiangsu Yabaite has a certain typicality and can provide some reference for other companies.After using the theory of fraud motivation to analyze the financial fraud of Yabaite,the causes of the fraud of Yabaite in this paper include: First,there are problems in the moral quality of senior management of Yabaite;second,when listing on the backdoor The signing of the performance compensation agreement and the pressure on the financing of the company's development made Yabaite have a motive for fraud.Third,Yabaite's failure to control its mechanism due to the control of major shareholders provided opportunities for fraud.Fourth,intermediaries Factors such as dereliction of duty and lack of government supervision have led to the failure of Yabaite's fraud to be discovered in a timely manner.Fifth,the punishment of the relevant government agencies has not led to the luck of the senior executives of Yabaite.After studying the motivation of Jiangsu Yabaite's fraud,this paper puts forward countermeasures and suggestions.First of all,it is necessary to strengthen the professional ethics education for senior executives;secondly,optimize the company's governance structure,prevent the problem of “one big share” and reduce the chance of fraud of major shareholders;then the government must conduct a strict review of the companies listed on the backdoor.In addition,we must improve the regulatory system and increase penalties.In addition,we must cultivate the awareness of investors.Finally,we must strengthen the supervision of CPAs to detect fraud as soon as possible.Among them,strengthening the supervision of CPAs is mainly from strengthening Explain the professional ethics education of CPAs,improve the supervision of CPA practice,and prevent vicious competition between firms.I hope this article can provide some ideas for the prevention of financial fraud by listed companies represented by Yabaite,the supervision of government regulatory authorities and the management of financial fraud,and the verification of corporate financial fraud by intermediaries.