Research On Financial Fraud Of New OTCBB Enterprises From The Perspective Of Risk Factors

The New OTC Market is an important part of China’s capital market and the cornerstone of China’s multi-level capital market.The Central Bank’s China Financial Market Development Report 2018 and the Securities and Futures Commission’s Symposium on comprehensively deepening capital market reform held in September 2019 both stressed the need to accelerate the reform of the new third board.In recent years,the phenomenon of financial fraud frequently occurs in the capital market and develops to the trend of becoming more and more violent.Although the New OTC Market in China has only been around seven years,the financial fraud incidents of listed enterprises have also emerged one after another.Financial fraud will not only hinder the sustainable development of enterprises,but also have a huge impact on the interests of stakeholders,and play a "reverse" role in the healthy development of the whole society and economy,financial Fraud has become an urgent task to be solved in economic development.Among the numerous financial frauds,the agricultural enterprise frauds are the serious disaster areas of financial frauds.Due to the particularity of the agricultural industry and the strong support of the State for agriculture,the agricultural financial frauds become more covert and difficult to be discovered,in addition,the New OTC Market entry threshold and market supervision are lower than the market,resulting in the new third board of agricultural enterprises more prone to financial fraud.Therefore,through an in-depth analysis of the financial fraud of the new three-board agricultural enterprises,the paper summarizes the general theoretical factors and the current system loopholes that lead to the financial fraud of the new three-board listed agricultural enterprises,it is of great importance to perfect the existing theoretical framework,to improve the investors’ability to identify the risks of listed companies and to optimize the resource allocation of regulators.Based on the theory of fraud risk factors,this paper analyzes the causes of fraud in the new three-board agricultural enterprises from the angle of individual risk factors and general risk factors,and combines the Xinqiu agricultural financial fraud case,it is found that the main causes of the fraud are the lack of the moral quality of the managers,the pressure of operating performance and paying debts,the defects of the corporate governance mechanism,the difficulty in identifying the financial fraud,and the light punishment of the fraud,at the same time,in the light of the analysis results,this paper puts forward some effective countermeasures to prevent and control the financial fraud of the new third board,in order to strengthen the attention and supervision of the regulatory authorities to the fraud of the new third board agricultural enterprises through the analysis of this paper,promoting the steady development of the New OTC Market.