Party building in state-owned enterprises is an important breakthrough in the corporate governance reform of state-owned enterprises during the 14th Five Year Plan period. Taking A-share listed companies as the research object, using the method of quasi-natural experiment and adopting the difference-in-differences model, this paper studies the influence of “upfront discussion” corporate governance mechanism of Party organization on financial fraud. It is found that after the Party organization participates in corporate governance in the way of “organization embedding”, the “upfront discussion” decision-making mechanism improves the corporate governance of state-owned enterprises from the decision-making principles and procedures, plays a good inhibitory role on the financial fraud of state-owned enterprises, and reflects the important role of the party organization in “taking the direction, managing the overall situation and ensuring implementation”. Further research shows that the organizational form of “two-way entry” helps the party organization reach a consensus with the board of directors and management, enhancing the subsequent implementation efficiency of the “upfront discussion” decision-making, and the high shareholding proportion of directors and state-owned enterprises with audit committees play a key role in collaborative governance of the “upfront discussion” mechanism, which has a more significant inhibitory effect on financial fraud.