Research On Financial Fraud Of "Wu Yang Construction"

Because of the characteristics of information asymmetry and long incubation period,it is difficult for the public to find out the financial fraud of non listed companies.Therefore,the financial fraud of unlisted companies is more likely to harm the development order of China’s economy and frustrate the investment enthusiasm of cash buyers,which has a negative impact on the credibility of the relevant national regulatory authorities.Enterprises themselves will also face huge fines and reputation damage,and even lead to bankruptcy crisis."Wuyang construction" is the first unlisted limited liability company in China’s financial market,which is caused by the Securities Regulatory Commission’s bond default due to financial fraud.In this paper,case study and literature research are used to select "five foreign construction" as the research object,analyze the causes of financial fraud of "five foreign construction",and put forward preventive measures.From 2012 to 2015,"Wu yang construction" falsely increased profits by hundreds of millions of yuan through false disclosure,offsetting accounts receivable and accounts payable.This paper uses the theory of "financial fraud" to analyze in detail.The greedy factor is that the greed of management and intermediary structure leads to financial fraud.The demand factor is that"Wu yang construction" bears the huge financial pressure,the need of external financing and the unfavorable environment faced by the construction industry.Opportunity factors include internal factors and external factors,the internal factors are the high-level and a fraud;the external factors are the failure of intermediary agencies to fulfill their duties.The exposure factors include financial fraud,high cost and low income,lax external supervision and the failure of audit institutions to fulfill their duties.Through the above research,we can draw the following conclusions:(1)the mode of low cost and high income is an important reason for financial fraud;(2)the function of the board of supervisors of unlisted limited companies should be brought into full play;(3)the relevant regulatory departments should not only strictly grasp the stock issuance system and relax the management of the bond issuance system;(4)the intermediary organizations need to improve Self cultivation should not violate laws and regulations.Through the research on the financial fraud of "five foreign construction",this paper extends to how to prevent the financial fraud of unlisted joint stock limited companies,mainly from the enterprise level,regulatory level,intermediary level and investor level to prevent and control.The government should establish the identification model of financial fraud;improve the claim mechanism to increase the cost of financial fraud;at the same time,it also needs to improve the information disclosure system,so that the information disclosed by non listed companies is true and accurate.Enterprises should establish a corporate culture of integrity,improve internal control,expand financing channels and improve financial skills.Intermediary organizations should strengthen the construction of professional ethics and professional skills.Investors need to invest carefully and distinguish right from wrong.