Research On Financial Fraud Of Hunan China Sun Based On Risk Factor Theory

According to the ACFE Global Fraud Survey 2020,released on April 16,2020,based on2,504 fraud investigation reports from 125 countries,financial fraud cases involved more than$3.6 billion in direct economic losses,accounting for about 5% of total annual revenue each year.Among them,the lowest incidence of financial report fraud caused the highest economic loss,and China’s financial fraud cases ranked first in the Asia-Pacific region.Thus,financial fraud caused great harm to the global economy,among which China’s financial fraud is more prominent.Therefore,it is of great practical significance for the prevention and control of financial fraud and the standardization of capital market order to have an in-depth understanding of the causes of financial fraud and the identification of fraud means of listed companies.This article selects Hunan China Sun Pharmaceutical Machinery Co.,Ltd.Cases of financial fraud as the research object,and lays the foundation for the case study by combing the development history of fraud factor theory.Taking China Sun as an example,we firstly introduces the development course of the company and ownership structure,and review the process of financial fraud and the punishment of the Securities and Futures Commission.Secondly,the fraud case of China Sun is analyzed from three aspects: fraud identification,fraud means and fraud motives.The Cscore financial fraud identification model is used to identify the fraud of China Sun beforehand,and it is found that the company has a large risk of fraud,and the company has increased its profit by RMB 448 million by means of financial frauds such as inflating sales revenue and construction in progress and reducing accounts receivable.Fraud identification and the analysis of the financial fraud means in advance for deep analyze its fraud motivation ramming foundation.Finally,in view of the motivation analysis of fraud from the internal and external aspects of the enterprise,including fraud motivation,moral quality,internal control of the company,social supervision and the intensity of illegal punishment,we put forward measures to prevent financial fraud of listed companies.The case of fraud China Sun is novel,more current and representative,and can reflect to a certain extent the basic regular features of recent corporate financial fraud.And It is hoped that the study of the company’s financial fraud can provide some reference for the prevention and control of some listed companies’ fraudulent behaviors.