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Impacts and Losses Caused By the Fraudulent and Manipulated Financial Information on Economic Decisions

Author

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  • Tak ISA

    (The Bucharest Academy of Economic Studies, Romania)

Abstract

Nowadays the effects of the fraudulent and manipulated financial information have been more controversial. We should take into consideration that the financial losses caused by fraudulent or manipulated financial information are remarkable. Preventing the fraud in the financial information has been an important issue by auditors all over the world. As the American economy is the dominant economy may cause and affect the capital market mostly all over the world. In the last decade we can see the financial losses caused by the fraudulent and manipulated financial information rather big. Today’s world has been affected by frauds and manipulation of the financial information. An investment decision based on false financial information causes the investors to suffer losses as was experienced in Enron and WorldCom cases. Financial information has, certainly, an important positive or negative effect in economic decisions. Positive or negative effects of financial information on economic decisions depend on reliability of the financial information. This paper aims to show the impacts of fraudulent on the financial information, effects on economic decision and what we should do for preventing the fraudulent or manipulation on the financial information.

Suggested Citation

  • Tak ISA, 2011. "Impacts and Losses Caused By the Fraudulent and Manipulated Financial Information on Economic Decisions," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 12(5), pages 929-939, December.
    • Handle: RePEc:rom:rmcimn:v:12:y:2011:i:5:p:929-939
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    File URL: https://www.rmci.ase.ro/no12vol5/08.pdf
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    References listed on IDEAS

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    1. Aasmund Eilifsen & Kjell Henry Knivsfla & Frode Saettem, 1999. "Earnings manipulation: cost of capital versus tax," European Accounting Review, Taylor & Francis Journals, vol. 8(3), pages 481-491.
    2. Maydew, EL, 1997. "Tax-induced earnings management by firms with net operating losses," Journal of Accounting Research, Wiley Blackwell, vol. 35(1), pages 83-96.
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    Cited by:

    1. Veledar Benina & Bašić Meliha & Čolpa Azra, 2022. "State and Perspectives of Forensic Accounting Development in Bosnia and Herzegovina," Journal of Forensic Accounting Profession, Sciendo, vol. 2(1), pages 1-18, June.
    2. Mahami, Zouleykha & Mouloudj, Kamel, 2020. "Factors Affecting Detection of Manipulation in Financial Statements: An Empirical Study from Auditors’ Perspective," MPRA Paper 108008, University Library of Munich, Germany, revised 30 Jun 2020.
    3. Razif Rosli & Intan Salwani Mohamed & Nafsiah Mohamed & Rohana Othman & Nabilah Rozzani, 2020. "Development of Fraud Prevention (FP) Model Using the Theory of Planned Behavior," Business and Economic Research, Macrothink Institute, vol. 10(3), pages 311-336, September.
    4. Abbas, Ahmad, 2017. "Earnings Fraud and Financial Stability," OSF Preprints f5jpx, Center for Open Science.

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    More about this item

    Keywords

    Financial information; fraudulent; manipulation; decision.;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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