Analysis Of The Identification And Regulatory Effect Of Annual Report Inquiry On Financial Fraud

In order to achieve high-quality development of listed companies,China has continuously explored the capital market regulatory system,among which inquiry regulation is a non punitive regulatory measure in the market regulatory system.In 2019,the Science and Technology Innovation Board of the Shanghai Stock Exchange began to disclose information on the annual report inquiry letters of listed companies.Listed companies that engage in financial fraud intentionally conceal matters that have a significant impact on their financial statements in order to reduce the likelihood of exposure to fraudulent behavior.However,companies with improper information disclosure are more likely to receive inquiry letters from the exchange,resulting in a higher probability of receiving annual report inquiry letters.Can such enterprises effectively identify and regulate their fraudulent behavior after receiving the annual report inquiry letter? This is an important issue that this article mainly studies.This article takes Amethyst Storage as a case company to explore the identification and supervision of financial fraud through annual report inquiries.The research object and perspective are both innovative.In terms of research objects,Amethyst Storage is the first sci-tech innovation board enterprise to be punished by the CSRC due to financial fraud.Due to the relatively new materials of the fraud incident,there are few literature studies on Amethyst Storage related issues.However,this article analyzes Amethyst Storage as a case object,which is innovative.From a research perspective,the current research on financial fraud mainly focuses on the causes,means,identification,and consequences.There is little literature on the issue of corporate financial fraud from the perspective of inquiry letters,and most of the research on inquiry letters is empirical.This study uses a case study approach,based on a new perspective of the annual report inquiry letter,to identify Amethyst storage fraud from the content of the inquiry letter and the efficiency of the enterprise’s response letter,which is innovative in terms of research perspective.This article mainly studies the identification and regulatory effects of two annual report inquiries on financial fraud in Amethyst Storage.Firstly,it introduces concepts such as annual report inquiry and information disclosure,and sorts out relevant theories and mechanisms.Secondly,it analyzes the causes,means,and consequences of financial fraud in Amethyst Storage.Thirdly,review the process of two annual report inquiries,identify financial fraud based on the content of the annual report inquiry letter and the efficiency of Amethyst Storage’s response letter,and analyze the regulatory effect of annual report inquiries on Amethyst Storage’s accounting fraud from four major paths.Finally,the following conclusions are drawn: First,from the perspective of identification,the content of the annual report inquiry letter and the efficiency of the response letter are helpful in detecting the financial fraud of Amethyst Storage;Secondly,from a regulatory perspective,the annual report inquiry effectively regulates the financial fraud of Amethyst Storage through four major paths: information disclosure,audit quality,internal control,and investor attention.In the enlightenment section,this article proposes suggestions and countermeasures for enterprises and investor regulatory authorities in order to reduce the occurrence of such counterfeiting and promote the healthy development of the capital market.