Research On Financial Fraud Under Performance Commitment Of M&A

With the rapid development of my country’s capital market,performance commitments have been widely used in the mergers and acquisitions and reorganization transactions by virtue of its advantages such as "reducing the risk of mergers and acquisitions" and "improving the performance of mergers and acquisitions".Breeding the motivation of financial fraud.According to Wind data,in recent years,in the mergers and acquisitions and reorganization transactions that introduce the performance commitment clauses,most of the promise commitment completion rates are concentrated in 100%-120%.Financial fraud also explodes frequently,which will infringe the interests of investors and disrupt the order of the capital market.At the same time,most of the current academic studies are the relationship between performance commitments,surplus management,and audit risks,and less study the relationship between performance commitments and financial fraud.Therefore,the relationship between the research commitment and financial fraud and effectively prevent the risk of financial fraud caused by performance commitments,which has become an urgent problem that needs to be solved at the moment.This article selected a typical case of Tongjitang as the research object,because according to the investigation of the Securities and Futures Commission,Tongjitang has conducted huge amounts of financial fraud during the2016-2018 performance commitment.force.This article first introduces the basic situation of the mergers and acquisitions,the process of mergers and acquisitions,the means and consequences of fraud,and then analyzes the cause of the fraud in Tongjitang based on the "Fraud Triangle theory".Five-dimensional financial fraud recognition model "identifies the signs of financial fraud in Tongjitang.The results of the research show that the performance commitment is mainly as a stressful role of financial fraud.The phenomenon of "high valuation","high premium",and "high performance commitment" occurred by the unreasonable asset evaluation method of the company before the acquisition of the target company,And the promise party encountered unfavorable factors such as: industry policy changes and corporate strategic decision-making errors during the performance commitment period.The performance commitment pressure was further enlarged,and the "opportunities" and "excuses" of financial fraud were based on the implementation of financial fraud.happened.Through the analysis of the typical case of Tongjitang,this thesis puts forward pertinent suggestions from three aspects: “Relieving pressure”,“Reducing opportunity” and“Eliminating excuses”,it is hoped that stakeholders can clarify the mechanism of performance commitment to financial fraud,reduce and resolve the corresponding risks as soon as possible,and reduce the occurrence of financial fraud under performance commitment.