A Case Study of the Formation Mechanism of “High Deposit and High Loan” in Listed Companies—Take Kangmei Pharmaceutical’s Financial Fraud as an Example

Abstract

Enterprise accounting fraud has always been a “cancer” for the healthy development of domestic and foreign capital markets. Many enterprises use information asymmetry to deceive investors and use accounting fraud to seek illegitimate benefits, and it has never ceased. Therefore, there is an urgent need to study and solve the problem of corporate accounting fraud. This paper studies this problem in order to improve the management ability of enterprises and improve the quality of audit information, which has important practical significance.

This paper intends to take Kangmei Pharmaceutical as an example to analyze the behavior motivation of accounting fraud, the means of fraud and the development of the situation after being punished by the securities regulatory authorities, and thus to reflect more comprehensively on the current state of governance of accounting fraud in Chinese enterprises. Finally, from the four aspects of establishing and improving of enterprise internal control, improving auditor’s auditing quality, strengthening accounts receivable control and strengthening enterprise risk management, it puts forward suggestions and opinions on improving the governance of accounting fraud in China’s enterprises.