Year: 2024
Type: article
Abstract: With the rapid development of market economy and Internet technology, the number of listed companies has steadily increased. Luckin Coffee, one of the famous local coffee brand in China, not only challenges Starbucks’s monopoly in the Chinese coffee market but also pioneers new directions for China’s coffee industry. However, financial fraud has become increasingly prominent, causing significant losses to the country, securities market, and investors. This paper examines relevant theories of financial fraud using Luckin Coffee as a case study, providing a detailed review of its fraudulent activities from start to finish. The analysis reveals that Luckin Coffee primarily engaged in financial fraud by inflating online orders, exaggerating main business income and costs, and conducting complex related transactions. Furthermore, this paper conducts an in-depth analysis of three factors contributing to Luckin Coffee's financial fraud: financing pressure, market competition and balance of payments. Concrete measures and suggestions are proposed to prevent and control both internal and externa; financial fraud within listed companies. By delving into the Luckin Coffee's financial fraud case, this research aims to support optimization efforts in financial management practices while enhancing the soundness of related enterprises’ financial system. It also seeks to help these enterprises enhance their competitiveness in the market while offering inspiration for improvements within China's capital market system. Additionally, this paper also reveals the negative impact of financial fraud on investor confidence, market order and sustainable development of enterprises, and emphasizes the importance and urgency of combating financial fraud.
Author: Kangtian Yang
Institution: Jimei University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4405818342