With the development of China’s economy, more and more malignant cases of
financial fraud in China listed companies happen frequently, such as the
financial frauds of Guangxia, green earth and Wanfu, which make a great impact
on the normal operation of the securities market and the confidence of
investors. On June 1, 2016, CSRC officially announced the administrative
punishment to Xintai Electric Co. which made Dandong Xintai Electric Co. become
the first one which was delisted because of financial fraud. This paper tries
to do deep analysis on the major inducements and methods of financial cheating
of Xintai Electric Co. so that we can find out some preventive means to reduce
the occurrence of financial fraud to prevent the investors from unnecessary
losing.
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