Research On Financial Fraud Of Kangmei Pharmaceutical Based On Risk Factor Theory

The rapid development of China's securities market has also exposed many problems.One is the persistent financial fraud of listed companies.In the year of 2019,China Securities Regulatory Commission issued 136 administrative punishment decisions,with an average of 11 cases of fraud occurring every month..Financial fraud-of listed companies violates the principle of "three public utilities" in the market,harms the interests of small and medium-sized investors,damages the function of market resource allocation,and thus affects the healthy development of the whole economy and society.Therefore,to study the financial fraud of listed companies is of great significance for improving the governance level of listed companies and reducing market risk.In 2019,the financial fraud case of Kangmei Pharmaceutical came to the surface and was investigated with an amount of nearly 30 billion yuan,which was called the largest financial fraud case in the history of China's A-share market and caused A sharp shock to the market.Focusing on the financial fraud of Kangmei Pharmaceutical,this paper firstly combs and analyzes its means of fraud,then USES the risk factor theory to explore the deep-rooted motivation of its financial fraud from the perspectives of individual risk factors and general risk factors,and then puts forward specific countermeasures to prevent and manage the financial fraud of the company.The study found that the causes of kangmei pharmaceutical's financial fraud were distorted management ethics,excessive financing demand,unreasonable shareholding structure,virtual presence of independent directors,ineffective supervision by accounting firms,and light punishment.Based on the motivation of fraud analysis,this paper puts forward the following Suggestions to prevent and control the financial fraud of listed companies:improve the management ethics and legal awareness;Develop competitive business plans;Optimize the shareholding structure and perfect the independent director system;Strengthen internal and external audit supervision;Increase penalties for financial fraud;Establish a claim mechanism for investors.