Finance Paper About Fraud

Business Finance

Week 8 Activity

The effect of bank fraud on bank customers

I feel that bank fraud is very serious. Bank fraud occurs almost every day. Bank fraud can cause customers to lose interest in banking with that particular bank if the situation occurred. Banks only provide customer with a portion of their money back if a major fraud occurred. Sometimes the bank will not provide customers with their money back. It depends on the situation.

Banks are mostly concerned only with escaping liability. It appears their success in making the customer bear all costs (even in cases where the bank might have been clearly at fault) means they also lack incentives to take preventive measures. Banks lose money, which affects other bank customers who ultimately make up for those losses and affects the bank's investors.

The effect of bank fraud on bank investors

Financial statement fraud can have an impact on any person or organization that has a financial interest in the success or failure of a company. A manipulation of the company's reported earnings or assets can affect a bank that extends credit to the company, a shareholder who invests money in the company, and those organizations that enter into contracts or agreements with the company. Bank fraud can cause bank investors to lose money as well. Investors will be more careful in selecting a bank to invest in bc of bank fraud.

The effect of bank fraud on other investors who are investing in other kinds of companies

Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws. Financial statement fraud will cause shareholders to overpay for their investment in the company and they will get less value for their money than they are aware. They may lose part or all of their investment if the company ultimately fails or has to go...