Research On Financial Fraud Of Kangmei Pharmaceutical From The Perspective Of Internal Control

In recent years,many scandals broke out in the pharmaceutical industry.Among them,Kangmei pharmaceutical’s financial fraud involved a huge amount of money and exposed a wide range of problems.The CSRC evaluated its "particularly serious consequences" and "extremely bad impact",which caused widespread heated discussion in the society.Kangmei pharmaceutical was filed for investigation by the CSRC in 2018,filed a class action lawsuit in 2020,and then publicly announced the judgment of 12 people,including Ma Xingtian,the former chairman and general manager of Kangmei pharmaceutical,on the case of manipulating the securities market in November 2021.The whole process took up to three years.Moreover,Kangmei pharmaceutical Securities Misrepresentation class action case is the first case of securities class action in China,which has a very significant impact.It has not only created many first cases in the history of justice,It also promotes the further discussion of the gatekeeper system in the industry.Therefore,the financial fraud case of Kangmei pharmaceutical has a certain representativeness.Selecting it as the research case of this article can expose the serious defects in the internal and external environment of China’s pharmaceutical industry,especially the internal control,so as to sound the alarm for other listed companies in the industry,standardize enterprise behavior and maintain market order.On the basis of carefully studying the relevant literature at home and abroad,this thesis adopts the method of combining theoretical analysis and case analysis.Firstly,this thesis makes a theoretical analysis of the relevant literature and theoretical basis,and then briefly combs and analyzes the common problems existing in some pharmaceutical enterprises engaged in financial fraud according to the macro background of China’s current pharmaceutical industry;Secondly,taking Kangmei pharmaceutical,a typical industry financial fraud,as the main case,taking the operation degree and effect of enterprise internal control as the starting point,by analyzing its financial reports in the period before the financial fraud scandal,this thesis summarizes the institutional causes,fraud means and impact consequences of Kangmei pharmaceutical’s financial fraud;Finally,it analyzes the reasons and mechanisms for the failure of its internal control system in identifying,controlling and preventing enterprise financial fraud,and puts forward targeted suggestions for enterprise internal control.The study found that the analysis of the annual financial report of the enterprise can see through the financial fraud of Kangmei pharmaceutical.The main items of financial fraud are monetary capital,income and expenses,cost profit,inventory and other accounting items with high risk;The main means of financial fraud are falsely increasing income,falsely increasing profits,whitewashing monetary capital business,concealing related party transactions,etc;The main characteristics of financial fraud are long time cycle,wide content,high amount and strong human subjectivity;In the process of financial fraud,the operation of enterprise internal control system fails,and it is obviously ineffective in identifying,controlling and preventing enterprise financial fraud.This thesis puts forward suggestions from the aspects of optimizing the internal management system of enterprises,standardizing the behavior of leaders and management personnel,and the introduction of relevant national policies,so as to ensure the operation effect of the internal control system by increasing the restriction and supervision of the internal control department,so as to improve the internal management and control level of Kangmei pharmaceutical industry,standardize the behavior of Listed Companies in the pharmaceutical industry,ensure the normal order of the capital market and promote the healthy development of the economy.There are 17 figures,10 tables and 86 references in this thesis.