The Research On Identification And Prevention Of Yinguan Company's Financial Fraud

Investors can use financial statements to understand the profitability,growth capacity and cash flow of listed companies,and then make investment decisions.However,the financial fraud incidents that listed companies continue to stage will bring great harm to the market and investors.Therefore,it is particularly necessary to identify and prevent financial fraud in listed companies.This paper firstly analyzes the financial fraud problem,and then reviews the theory and some viewpoints of the causes,recognition and supervision of financial fraud through literature review,which lays the foundation for the analysis of the financial fraud incident of Yinguan Company.Theoretical basis.Yinguan Company was the first company to operate a large-scale machine tool listed in Yunnan Province in 1993.It was brought to the attention of the CSRC in2017 due to the exposure of the financial fraud scandal.The company was subsequently found to have financial fraud.Through the analysis of the current situation of the company and the current situation of fraud,this paper leads to three representative financial fraud problems of the company: First,the use of means to confirm the operating income in advance to increase profits;second,the use of fictitious cooperation By means of inflated gains,the sales revenue of Yinguan Company is higher than the contract price,and the annual discount rate of the project is also much higher than the bank loan interest rate for the same period;third,the cost is reduced.In addition,when a project of Yinguan Company loses money,the company will deliberately exaggerate the loss figures and conceal the assets so that they can be released to increase profits in the future.This paper first introduces the basic situation of Yinguan Company from the aspects of asset size,governance structure,shareholding structure,organizational structure,external environment,management and core competitiveness.Then it analyzes the financial fraud of Yinguan Company and concludes that The followingthree aspects: The first is the pressure factor,the fierce market competition,the continuous decline of profits,and the company's consecutive years of operating performance close to the delisting standard makes the company face tremendous pressure,the second is the opportunity factor,the silver crown company Insufficient equity concentration and internal control provide internal opportunities for fraud.The first major shareholder has absolute control over the company,and the lack of external supervision and the lack of independence of the audit also provide external opportunities for fraud.The third is the excuse factor.Management believes that the company's future is based on financial fraud for personal gain;then this paper analyzes the profitability,financial status and operational capabilities of Silver Crown through the overall analysis,horizontal analysis,vertical analysis and structural analysis of the financial statements.Through the analysis of the cash flow statement and the self-checking report disclosed It identifies the fraud risk signal of Yinguan Company.Finally,based on the identification of financial fraud,this paper puts forward suggestions on how to prevent financial fraud of listed companies from the aspects of CPAs and firms,listed companies themselves,regulators and shareholders:First,the company should improve its internal governance structure to achieve equity equity.Second,in terms of certified public accountants and firms,it is necessary to further strengthen risk-oriented auditing,strengthen practitioners' professional ethics,and further improve the internal control of the firm;Third,the relevant regulatory authorities should improve the regulatory measures for the capital market,severely punish the responsible persons involved,and improve the supervision of information disclosure;Fourth,provide advice to stakeholders such as investors.