Research on the Motivation and Countermeasures of Financial Fraud of Listed Companies—Taking Kangmei Pharmaceutical as an Example

Abstract

Kangmei Pharmaceutical fell into crisis due to the exposure of its financial fraud. Its fraudulent behavior not only damaged the company's reputation but also caused huge losses to investors. It also provided a background for studying the motives and countermeasures of financial fraud in listed companies. Based on the GONE theory, this paper systematically analyzed the motives of Kangmei Pharmaceutical's financial fraud from four factors: greed, opportunity, need, and exposure. It also adopted the literature research method and case analysis method for research and proposed countermeasures such as cultivating an honest corporate culture, optimizing performance assessment and incentive mechanisms, improving the company's internal control mechanism and continuous risk assessment and monitoring in combination with the GONE theory. For enterprises, the significance of studying financial fraud in listed companies lies in promoting self-reflection and improvement. For industry, studying financial fraud in listed companies has the significance of improving the overall regulatory level of the industry. For the country, studying financial fraud in listed companies is of great significance for maintaining financial market stability, protecting investors' rights and interests, and promoting healthy economic development.