Study On Motivation And Prevention Strategy Of Financial Fraud In Erkang Pharmaceuticals

Financial fraud is not only a global problem,China is no exception.In recent years,according to the statistical data,the cases of financial fraud of listed companies continue to appear,and the amount of fraud is also growing,which is shocking.The methods and forms of financial fraud also emerge endlessly,and develop towards complexity,concealment and difficult to identify.Once the financial fraud of listed companies is exposed,it will reduce the company’s reputation,will make investors lose confidence in the credibility of the capital market regulatory agencies and audit departments,thus disrupting the normal order of the capital market,endangering the construction of China’s capital market.Therefore,how to effectively govern and prevent financial fraud of listed companies,protect the vital interests of investors and promote the healthy development of capital market is a problem that must be solved in China’s capital market.Taking the specific case of financial fraud of Erkang Pharmaceuticals as the object of analysis,this paper analyzes the causes of fraud and prevention strategies of Erkang Pharmaceuticals.In 2011,Erkang Pharmaceuticals was controversial at the beginning of listing on the Shenzhen Stock Exchange.Many times have aroused public scepticism.The means of financial fraud exposed by Erkang Pharmaceutical is the fictitious trade cycle,that is to say,the related transaction is disassociated through the third party subject,so as to achieve the purpose of manipulating the main business performance.The characteristic of this kind of fictitious transaction lies in using overseas subsidiary to carry on circular transaction,belongs to a kind of new fraud means,the concealment is high,so this case is compared by typical,representative.Firstly,this paper expounds the research significance and background of financial fraud of listed companies,and thinks that financial fraud is a difficult problem to be solved in the whole world.Based on this,the existing literature and research on financial fraud are summarized in terms of motivation,means and countermeasures,and the theoretical concepts and characteristics of financial fraud are summarized according to the existing literature.Secondly,this paper introduces the general situation of Erkang pharmaceutical industry and company,and analyzes the specific means of financial fraud,financial signs and the consequences of financial fraud.And analyze the causes of financial fraud in Erkang Pharmaceuticals,so as to find out the underlying causes of financial fraud in Erkang Pharmaceuticals.Finally,based on the analysis of the underlying causes,this paper puts forward the prevention strategy of financial fraud in Erkang Pharmaceuticals,that is,to construct a complete framework of fraud governance from internal governance to early warning of indicators and then to external supervision.