A Case Study Of Performance Commitment Inducing Financial Fraud

In recent years,The mergers and acquisitions,backdoor listings of China's listed companies have become a common practice,the premium is as high as dozens of times,and the high-performance commitments appear frequently.Most of these commitments are difficult to achieve,the actual performance and commitment are far apart,the performance of the M&A company is not up to standard,it has caused a series of adverse effects on the acquirer.This article selects the case of Yabait,taking the two aspects of performance commitment and financial fraud as the entry point,and studies and analyzes the case of financial fraud caused by Yabato to achieve the performance promise made by Zhonglian Electric.The mechanism of action,fraud identification,fraudulent means and economic consequences were analyzed.This paper expects to analyze the case of financial fraud by Yabate in order to achieve performance commitment,and find the correlation between performance commitment and financial fraud,aiming at how performance commitments induce financial fraud,by analyzing how to distinguish financial fraud,means of financial fraud and economy Consequences,suggesting how to prevent financial fraud from the perspective of performance commitment better.The paper concludes that the performance commitment is more and more widely used in enterprise mergers and acquisitions.A reasonable performance commitment can play a role in valuation adjustment and incentive management,and play a synergistic effect of mergers and acquisitions.However,in the process of mergers and acquisitions,the management of the acquired party may make a performance commitment to obtain a high valuation from the actual profitability of the company due to bad motives,and the company is facing a huge amount of performance in the future.The risk of compensation,under the pressure of huge performance,the management generates fraud motives and conducts financial fraud,causing huge damage to the company itself,the acquirer and the external small and medium investors.Therefore,excessive performance commitments will generate greater risks,and reasonable performance commitments can motivate management to improve the company's performance and promote smooth mergers and acquisitions.