Research on Financial Fraud Based on Changyuan Group's Acquisition of Changyuan and Eagle

Abstract

In recent years, with the development of the China’s economy, in order to seek business growth points, the number of mergers and acquisitions of enterprises has increased rapidly. In the process of mergers and acquisitions, there are often some financial fraud behaviors, such as fictitious income and false statements, to push up the merger and acquisition premium, which will greatly damage the stability of the financial market and the legitimate rights and interests of investors. This paper adopts the financial fraud case of Changyuan Group's acquisition of Shanghai Heying Electromechanical Technology Co., LTD. in 2016 as an example, and combines the fraud triangle theory to analyze the motivation of financial fraud. According to the punishment announcement and other information, this paper analyzes the identification of financial fraud information with a three-dimensional model, analyzes and presents the consequences of financial fraud, and proposes the suggestions and enlightenment for subsequent M&A cases.