Case Study On Financial Fraud Of Ningbo Sunlight Electrical Appliance Co.,Ltd.

Since the reform and opening up,the capital market has developed rapidly and the market mechanism has been reformed.Many small and medium-sized enterprises have emerged.The government launched the small and medium-sized board market in order to provide financing platforms for emerging SMEs and promote economic restructuring.However,since the operation of the small and medium-sized board market,use financial fraud to improve performance events frequently appear.Seriously disrupted the order of the small and medium-sized board market.The frequent occurrence of financial fraud not only aggravates the asymmetry of market information,but also reduces the efficiency of resource allocation in the capital market.It also brings huge economic losses to investors,which leads to the loss of confidence of the society to the market and the fairness of the whole society.Fairness,market integrity mechanisms have been questioned.Therefore,studying the financial fraud of listed companies and finding countermeasures against prevention and governance are of great significance to the sustainable development of the capital market.In this context,this paper analyzes the case of financial fraud in Sunlight based on the theory of fraud triangle.The article first introduces the research background,research significance,research content and framework structure,and introduces the theoretical basis of this paper,and summarizes the domestic and international research results related to financial fraud..Secondly,it introduces the general situation of the company,the fraud process and the means of fraud.In 2010,Sunlight performance began to decline after the listing in the small and medium-sized board.In order to keep the company’s shell resources and to allow the company to restructure,the company made a loss of litigation and government subsidies in 2015 in the event of a loss in 2014,causing the company to turn losses into profit.After learning about the methods and processes of Sunlight fraud,the paper analyzes the causes and disadvantages of Sunlight fraud.The pressure of Sunlight fraud is mainly mismanagement,failure of transformation and avoidance of delisting.The chances of fraud are mainly the failure of governance structure and the defects of internal control,the audit committee is ineffective,the external audit institutions and independent directors lack independence,the excuses for rationalization of fraud are to preserve the shell resources and to reorganize the company and the lack of integrity of the company’s executives.After the above analysis,this paper proposes that the enterprise should establish an effective audit committee,strengthen internal supervision of related party transactions,and strengthen corporate compliance culture construction,improve the voting status of small and medium-sized shareholders in the election of directors and supervisors at the general meeting of shareholders,improve the voting mechanism in this regard,introduce creditor supervision system,improve laws and regulations related to the period of cooperation between accounting firms and enterprises,and increase penalties for violations of accounting firms,strengthening the management control of government subsidies,using new media to supervise listed companies,and increasing corporate fraud costs from three levels: internal enterprise,accounting firm and external supervision,which are related to preventing financial fraud.It has certain practical significance for the prevention of capital market and the management of financial fraud.