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The Causes and Financial Consequences of Corporate Frauds

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Entrepreneurship, Finance, Governance and Ethics

Part of the book series: Advances in Business Ethics Research ((ABER,volume 3))

Abstract

Another wave of corporate scandals has hit the market in the last decade, reviving attention to the effect of these events on shareholder value, corporate governance and stock market reactions. Given this evidence a growing body of research has investigated the determinants of frauds, the effects of frauds on investors and stakeholders wealth and tried to identify channels and tools to early detect frauds and therefore reduce the loss in social welfare. This chapter provides a comprehensive view on the state of the current research on these issues and provides suggestions for future research.

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Notes

  1. 1.

    The authors define fraud detectors and revelators “whistleblowers” in accordance with common jargon.

  2. 2.

    They report a large number of examples among which: “Martin Grass, CEO of Rite Aid Corporation, and Jeffrey Citron, CEO of Datek Online, had something in common: they liked to commute to work by personal helicopter” (Ahrens 2002); “Several CEOs had a real passion for sports which perhaps influenced them to commit fraud. Mickey Monus “borrowed” about $10 M of Phar-Mor’s funds to cover the debts of one of his sports team” (McCarty and Schneider 1992).

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Author information

Authors and Affiliations

  1. Department of Finance, Bocconi University, Milan, Italy

    Stefano Bonini & Diana Boraschi-Diaz

  2. Department of Finance, School of Business, New York, NY, USA

    Stefano Bonini

Authors
  1. Stefano Bonini
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  2. Diana Boraschi-Diaz
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Corresponding author

Correspondence to Stefano Bonini .

Editor information

Editors and Affiliations

  1. , School of Business, University of Birmingham, Edgbaston Road, Birmingham, B15 2TY, United Kingdom

    Robert Cressy

  2. , Schulich School of Business, York University, Keele Street 4700, Toronto, M3J 1P3, Ontario, Canada

    Douglas Cumming

  3. , Norwich Business School, University of East Anglia, Norwich Research Park, Norwich, NR4 7TJ, United Kingdom

    Chris Mallin

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Bonini, S., Boraschi-Diaz, D. (2013). The Causes and Financial Consequences of Corporate Frauds. In: Cressy, R., Cumming, D., Mallin, C. (eds) Entrepreneurship, Finance, Governance and Ethics. Advances in Business Ethics Research, vol 3. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-3867-6_13

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