A Case Study Of Financial Fraud In Huanrui Century's Backdoor Listing

With the continuous development of my country’s economy,the number of enterprises is increasing.In order to expand and develop,enterprises will inevitably need to obtain more financial support.One of the most important methods is to obtain listing qualifications to make public in the capital market.To raise funds.Nowadays,companies can go public through IPO,but in our country,the requirements for IPO listing are strict,the threshold is high,the process is complicated,and the review time is long.Especially for some companies that urgently need to raise funds or are small in scale,IPO listing Not a wise choice.On the contrary,the threshold for backdoor listing is relatively low,the listing cycle is shorter,and the procedures are easier.Since backdoor listings have various advantages over IPOs,backdoor listings frequently appear in the capital market.Statistics show that from 2011 to 2019,there were nearly 150 successful backdoor listed companies in 9 years.All along,with the increasing pressure of competition among enterprises,financial frauds have emerged one after another.Although the requirements for backdoor listings are not as strict as those for IPOs,there are still companies that want to use financial fraud to meet the relatively low review requirements for backdoor listings.In addition,there is a certain lack of transparency in the backdoor listing itself,so it is more likely to cause financial fraud due to the negligence of the regulator or the fluke of the company.However,due to the backdoor listing,the information and main business of the actual controller of the listed company and the backdoor party will change.If financial fraud occurs,the impact will be no less than that of the IPO listing,and it should be subject to the relevant regulatory authorities to pay attention.Therefore,studying financial fraud based on actual cases in my country is helpful to improve the corporate governance structure and establish a scientific and effective internal and external corporate supervision system.On the basis of combing the relevant literature and theories,this article introduces and reviews specific cases of H&R Century ’s financial fraud,such as its financial fraud methods and effects.The risk factor theory is a more comprehensive method for studying the causes of financial fraud.It has comprehensively studied the deep causes of financial fraud from five dimensions,which has great applicability and analytical value.Therefore,this article mainly uses this kind of analysis method,and at the same time,it will make a more comprehensive analysis of the situation from the two dimensions of the backdoor party and the listed "shell" company with the help of its special nature of backdoor listing.Finally,the article will,based on the above analysis of the motivation information,put forward preventive countermeasures and suggestions from the four perspectives of the backdoor party,the listed company "shell" company,the two backdoor listed companies,plus the intermediary accounting firm and the regulatory agency to a certain extent to avoid the occurrence of fraud.