Number Of Fraud Cases Research Articles

THE EFFECTS OF ACCOUNTABILITY, GOVERNANCE CAPITAL, AND LEGAL ORIGIN ON REPORTED FRAUDS

An institutional perspective is employed to illuminate the complexity of frauds in various diverse economies, in order to enhance the efficacy of previous accounting concepts. In this study, the effects of the legal, regulatory and human framework of the strength of auditing and reporting standards, and the governance capital related to global sustainable competitiveness and economic growth, etc. are analysed by linear regression (OLS) methods. Moreover, the role of other indicators i.e. financial freedom, the extent of director liability and legal origin, are interrelated with the number of fraud cases. From the results, it appears that an increased level of governance capital, financial freedom from government pressure, strengthened transparency and more protected minority investors through liable directors might increase the number of reported fraud cases in the countries and years examined. The existence of legal origin also seemed to be an appropriate proxy for an improved understanding of fraud characteristics. This evidence suggests it is worth investigating in depth the nature of financial crimes across countries for a better understanding of this phenomenon. In this way, these findings might have sufficient potential in the case of adequate policy implications within a less litigious business environment to resolve the undesirable consequences of impending financial downturns, and to achieve sustainable competitiveness and economic development.

Security Challenge, Bank Fraud and Commercial Bank Performance in Nigeria: An Evaluation

The issues of insecurity and fraud in the banking sector of the Nigerian have become the concern of everyone. Achumba, Ighomereho, and Akpor-Robaro (2013) maintain that the concrete evidences of these incidences in different parts of Nigeria indicate that the security challenge in the country is enormous and complex and would continue to be, if the situation remains unabated. This paper evaluates the insecure situation, bank fraud and their impact on bank performance. This evaluation requires the formulation of some testable hypotheses to confirm the impact of insecurity and fraud on bank performance. Multiple regression analysis was applied to determine if there is any significant relationship between the indicators of bank insecurity, fraud and the earnings before tax (the indicator of bank performance) of the Commercial banks in Nigeria. Data were obtained through secondary sources on the indicators of bank insecurity and fraud and the earnings before tax of Commercial banks in Nigeria for the period 1991 -2013 from Nigeria Deposit and Insurance Corporation’s Annual Report. The results of the study demonstrate an inverse relationship between Expected Losses on insecurity and Fraud (ELF), Number of Fraud Cases (NFC) and Number of Staff involved in Fraud Cases and earnings before tax of commercial banks in Nigeria. The results of the Granger causality test show a uni-directional causality from bank insecurity and fraud to commercial bank performance. However, the Volume (Amount) of bank insecurity, Fraud cases (VFC) and earnings of commercial banks in the parsimonious ECM show positive but significant relationship. We therefore recommend that both government and banks should team up and involve foreign intervention in fighting insecurity and fraud in the banking sector. New staff of the bank should have a guarantor who will pledge a reasonable sum with the bank in case the staff is involved in fraud. Directors should be knowledgeable in accounting and banking and must have stakes in the bank.

Fraud Risk Management

Fraud is an intentional act committed to procure an unfair or unlawful gain. The study found that there were a more number of fraud cases with high variability witnessed in the second half-of-year 2011-12, but the variability was less in case of gender. The Delhi suffered with the higher amount of fraud losses. More than 63 percent of total fraud cases reported in 2011-12 were hailed from the financial services sector, followed by the technology and transportation. The majority of the fraud cases were recorded in the banking sector and money lost by banks due to scams and frauds have doubled in the past-four years. To mitigate the fraud cases the concern authority should apply the process of (1) assessment of risks (2) Design (3) Implementation (4) Evaluation.

SEC Preventative Measures Against Securities Violations and Fraud Post-JOBS Act

The purpose of the Securities Act and the Exchange Act is to supply investors with the necessary information to make informed decisions regarding an entity’s offerings. After the 2010 financial crisis, the economic crisis devastated the economy leaving many without jobs. In response to this economic recession, President Obama signed the Jumpstart Our Business Startups Act (JOBS Act) into law in 2012 as one method of stimulating the economy. This Act deregulated the securities laws for small businesses in the hopes of creating jobs and invigorating the economy. These changes allow a small business more access to capital by reducing the reporting requirements for certain entities and increasing access to shareholders. However, many think that such deregulation of the securities market could generate investor fraud by trading investor protection for capital formation and job growth. Two years after this Act was passed, the U.S. Securities and Exchange Commission (SEC) filed a small number of fraud cases that involve the JOBS Act changes, illustrating how bad actors can hide themselves from SEC view and use the JOBS Act changes to defraud investors. The problem with passing judgment based on these cases is that the SEC has not finalized the rules regarding a significant section of this Act: Title III related to the crowdfunding exemption. Because the SEC has not released those changes, investor fraud cases could increase.

Smarter fraud investigations with big data analytics

Call it a ‘scam’, ‘rip-off’, ‘cheat’ or ‘sting’, but whatever you call it the impact of fraud hits businesses equally hard. And the bad news is that the number of fraud cases is not falling but rising. Fraud hits businesses hard. And the bad news is that the number of fraud cases is rising. The pressure is on for companies to find effective solutions and tackle fraud in a smarter way. Shaun Hipgrave of IBM explores three aspects of smarter fraud investigations: smarter technology, improved data visualisation and better internal communication. And a critical element in this is using big data analytics to detect fraud fast and share critical investigative information.