Research On Fraud In Related Transactions Of Listed Companies

With the development of economy and society,China’s capital market has entered a new stage of development,and the overall situation keeps a good momentum.On October 28,2019,the Communist Party of China held the Fourth Plenary Session of the 19 th Central Committee.The meeting laid emphasis on promoting high-quality economic development,which undoubtedly established a higher standard for the quality and the accuracy of financial information.Listed companies,as an important force to boost economic development,have a significant influence on the capital market,so the accuracy and quality of their financial statements are also critical to capital market.In order to raise more funds,some listed companies use connected transactions to whitewash their financial data,but connected transactions are usually so disguised that it is difficult for auditors to identify this kind of fraud,so the audit of connected transactions fraud has also become the focus and difficulty of financial statement auditing.If the fraud of related parties cannot be effectively identified,most companies will pursue the benefits by frauding,thus leading to a situation of "bad money driving out good money" and impeding the high-quality development of my country’s economy.Based on the analysis of related theories and the status quo of connected transaction fraud in my country’s listed companies,the thesis takes Kangdexin as the object of case study to conduct a more thorough analysis and summary for connected transaction fraud and has certain theoretical and practical significance.Using literature analysis,normative analysis,and case study methods,the thesis analyzes the financial data abnormalities,motivations,methods and effects of the connected transaction fraud of Kangdexin.And on the basis of above,the author proposes corresponding countermeasures to reduce fraud in connected transactions.The full text consists of six parts in total.The first chapter is the introduction,which mainly introduces the background,purpose and significance of the research.The second chapter is the basic theory,focusing on the related concepts of connected transactions and the theories involved in connected transactions fraud.The third chapter is the analysis of the status quo of connected transactions fraud,discussing in detail the basic situation of connected transactions fraud in my country’s listed companies.The fourth chapter is the case analysis of Kangdexin which commited a fraud in connected transaction.The fifth Chapter summarizes the above cases and puts forward relevant countermeasures and suggestions.Through the analysis of the fraud in connected transactions incidents of Kangdexin,we can know that due to the combined influence of major shareholders’ dominance,the negligence of auditors,and the low cost of illegality,the connerted transactions fraud of listed companies has been repeatedly met with setbacks.At the same time,due to the hidden nature of connected transactions and its amphibolous definition,it is difficult to effectively identify connected transactions fraud.The impact and consequences of fraud in connected transactions cannot be underestimated,and it has become a “cancer” that hinders economic and social development.Only the government,enterprises,and auditors work together,can the connected transactions fraud be effectively curbed,thus achieving high-quality economic development in China.