A Case Study On Financial Fraud Of Sunlight Company

In recent years,the quality of financial information has been increasingly valued by stakeholders,and some of the important financial indicators are important basis for stakeholders to make financial decisions.However,as China’s capital market is still developing,there are still many imperfections,which lead to the emergence of financial fraud in listed companies.For the enterprise itself,although financial fraud can bring benefits to the enterprise in the short term and alleviate the problems faced by the enterprise,in the long run,it will be subject to investigation by various regulatory authorities.Once the financial fraud is exposed,it will damage the corporate image and affect the enterprise.Market position may even lead to direct bankruptcy and liquidation of enterprises;for many investors,financial fraud of listed companies damages investors’ own interests and also suppresses investors’ investment enthusiasm;for securities market,financial fraud of listed companies will be destroyed.A normal good market order will affect the healthy and sustainable development of the national economy.Therefore,how to identify and effectively prevent financial fraud in a timely manner is a very meaningful research topic.This paper takes the listed company called SUNLIGHT as the case enterprise.The research content is mainly carried out from the following aspects: First,a brief introduction to ST Sunlight is described in detail,which details the causes and consequences of financial fraud in ST Sunlight.Then,the research on the identification of financial fraud in ST Sunlight is conducted.Through the analysis of the overall financial situation,the performance of ST Sunlight is declining year by year.Further,the analysis of the financial indicators of ST Sunlight is found by the ratio analysis method,indicating the possibility of fraud in ST Sunlight.Then through the analysis of the financial report,we found the clues of the fraudulent behavior of ST Sunlight.Next,it analyzes in detail the methods of fraud and the whole fraud process of ST Sunlight.The main methods of financial fraud in ST Sunlight are: inflated litigation income,utilizing the extracorporeal circulation of related party funds and inflating government subsidy income.Then combined with GONE motivation theory to deeply analyze the causes of financial fraud in ST Sunlight.First,the management’s moral level is not high,lack of good sense of integrity,and the desire to obtain improper benefits;second,the unreasonable corporate governance structure and ownership structure Unreasonable provides opportunities for corporate financial fraud;third,the company’s poor business conditions,financial pressure and possible risk of ST caused the company to have bad demand for financial fraud;Fourth,the concealment of fraudulent means,the supervision department’s default And the low cost of fraud leads to a lower likelihood of corporate financial fraud being exposed.Finally,in order to prevent the recurrence of similar fraud incidents,some feasible suggestions were proposed from the aspects of internal corporate governance and external audit.