Accounts Receivable Factoring Fraud: A Case Study of Guangdong Rongtai

Amid China’s economic growth and rising national strength, some listed companies have committed financial fraud to inflate financial statements, attracting investment and securing early financing. Accounts receivable, as an accounting subject that needs to be focused on when analyzing earnings management and financial fraud, can clearly reflect the fraudulent behavior of enterprises. This study takes Guangdong Rongtai as a case to analyze the implementation methods and specific behaviors of the company’s accounts receivable factoring fraud, as well as the impacts and harms of such fraudulent behavior on the securities market, investors, trading market, and national economy. By adopting a case study method and integrating the Fraud Triangle Theory and GONE Theory, this study finds that Guangdong Rongtai engaged in fraud through fictitious transactions, manipulation of factoring conditions, and other means, and its fraud motives include performance pressure, internal control deficiencies, and other factors. Solutions and countermeasures are proposed. This study provides a warning for the existence of accounts receivable factoring fraud, identifies the root cause of the problem, and provides a reference for fraud governance.