Research On Financial Fraud Risk Early Warning Of Listed Companies From The Perspective Of "High Deposits And High Loans"

Firstly,this paper combs the literature on the causes of "double high deposit and loan",financial fraud means and financial fraud early warning model.Then,this paper introduces the basic information such as kangdexin’s business status and ownership structure,and combs the beginning and end of kangdexin’s debt default.We then analyzed the main reasons for Kangde’s emergence of "double high deposits and loans",excluding the status of state-owned enterprises,characteristic economic policies,short-term debt repayment needs,large capital expenditure and other factors,and believed that the occupation of funds by major shareholders and financial fraud were the main reasons for its "double high deposits and loans".We also make a specific analysis on the accounting and financial fraud means of major shareholders.Kangdexin obtains the assets of related parties through related party procurement,and then sells them to related parties at a high price,so as to falsely increase profits.At the same time,Kangde Group pledged Kangde Xin’s equity on a large scale to obtain funds,and "invested" relevant objects to form new related assets.Then,kangdexin raised funds through fixed increase and other ways,acquired the affiliated assets of Kangde group at a high price,maintained a high share price,and made it convenient for Kangde group to obtain more funds when equity pledge,and repeated such operations.This is the way kangdexin inflated profits through related party transactions and delivered benefits to major shareholders.Then this paper compares kangdexin with normal comparable companies,and looks for clues of kangdexin’s financial fraud from two aspects of financial characteristics and nonfinancial characteristics.The 12 suspicious points that can be inferred from kangdexin’s financial fraud are summarized as follows:(1)the gross profit margin is much higher than that of the same industry;(2)The rate of return on monetary funds is too low;(3)The contradiction between the income ratio of accounts receivable and gross profit;(4)Contradiction between net operating cash flow and net profit;(5)Capital expenditure is untrue;(6)The pledge proportion of controlling shareholders is too high;(7)Change auditors frequently;(8)The disclosure interval of annual report is long;(9)The audit cost is very high;(10)Independent directors do not play a role;(11)The largest shareholder is the sole shareholder;(12)The fund’s long-term large-scale reduction.The corresponding indexes are extracted,such as the rate of return of monetary funds,the gap between gross profit margins,the ratio of accounts receivable to income,the proportion of operating cash flow,capital expenditure,the pledge proportion of controlling shareholders,whether the auditor is replaced,the disclosure interval of annual reports,audit fees,the working place of independent directors,the internal check and balance index and the change of fund shareholding.Then this paper uses logit model for regression,and finds that the rate of return on monetary funds,the pledge proportion of controlling shareholders,the internal check and balance index and the authenticity of capital expenditure are the key indicators to screen the fraudulent companies in the double high deposit and loan companies.Since enterprises have the characteristics of "double high deposit and loan",we first need to test the authenticity of monetary funds through the rate of return on monetary funds.Secondly,an important reason for the double high of deposit and loan is that the controlling shareholder hollows out the company.At this time,we need to use the two indicators of "pledge proportion of controlling shareholder" and "internal check and balance index" to judge the possibility of large shareholders hollowing out the listed company.When the shareholding proportion of the first largest shareholder suppresses the second to tenth shareholders,and the controlling shareholder has a large amount of equity pledge,the possibility of financial fraud of the company is greatly improved.Finally,the more reasonable explanation for the double high of deposit and loan is that enterprises have a large amount of capital expenditure.This is that we can use the "authenticity of capital expenditure" index to verify whether enterprises really have a large amount of capital expenditure.These four indicators are the biggest enlightenment given by Kangde new case.Then,we bring kangdexin’s financial data into logit model to calculate the probability of financial fraud.According to the calculation of Logit model,the probability of financial fraud of kangdexin from 2016 to 2018 exceeded 70%,far exceeding the critical point of 50%.The model results also confirm the above analysis framework.Finally,this paper tests the whole sample,brings in the data of 875 enterprises,and infers the possibility of financial fraud.Of the 72 companies with fraud,we identified 47 companies with the correct rate of fraud;Among the 828 companies without fraud,we misjudged 215 cases,with an accuracy rate of 74%.Overall,the logit financial fraud prediction model in this paper has a good prediction effect.