Financial frauds throughout the years – literature review
DOI:
https://doi.org/10.18559/ref.2024.1.985Keywords:
financial fraud, financial crimes, negative impact, bank fraudAbstract
Financial frauds have been a growing problem across the global financial markets. Losses generated by such illegal activities affect both the global economy and individual entities, especially those operating in the financial market. Perpetrators of such frauds seem to always be one step ahead of the law enforcement, regulators as well as private sector entities such as banks and scientists. This review examines publishing actions taken throughout the years. It also shows whether there has been any correlation spotted between the number of papers published in a particular year and the events on the financial markets. The study involved a systematic literature review to achieve the set goals. Following the final results of the article, it is clear that the issue of financial frauds has been a growing global concern. It is crucial to strengthen the collaboration between the regulators, law enforcement, academic environment and private sector. Cooperation across the sectors should include research on how to prevent and mitigate the consequences of this kind of frauds.
Downloads
References
Abdallah, A., Maarof, M. A., & Zainal, A. (2016). Fraud detection system: A survey. Journal of Network and Computer Applications, 68, 90–113. https://doi.org/10.3390/app12199637 DOI: https://doi.org/10.1016/j.jnca.2016.04.007
View in Google Scholar
Ahmed, M., Mahmood, A. N., & Islam, M. R. (2016). A survey of anomaly detection techniques in financial domain. Future Generation Computer Systems, 55, 278–288. https://doi.org/10.1007/978-3-030-70713-2_60 DOI: https://doi.org/10.1016/j.future.2015.01.001
View in Google Scholar
Akoglu, L., Tong, H. & Koutra, D. (2015). Graph based anomaly detection and description: A survey. Data Mininng and Knowledge Discovery, 29, 626–688. https://doi.org/10.48550/arXiv.1404.4679 DOI: https://doi.org/10.1007/s10618-014-0365-y
View in Google Scholar
Ampudia, M., & Van den Heuvel, S. J. (2022). Monetary policy and bank equity values in a time of low and negative interest rates. Journal of Monetary Economics, 130, 49–67. https://doi.org/10.1016/j.jmoneco.2022.05.006 DOI: https://doi.org/10.1016/j.jmoneco.2022.05.006
View in Google Scholar
Ashton, P., & Christophers, B. (2015). On arbitration, arbitrage and arbitrariness in financial markets and their governance: unpacking LIBOR and the LIBOR scandal. Economy and Society, 44(2), 188–217. https://doi.org/10.1080/03085147.2015.1013352 DOI: https://doi.org/10.1080/03085147.2015.1013352
View in Google Scholar
Awoyemi, J. O., Adetunmbi, A. O., & Oluwadare, S. A. (2017). Credit card fraud detection using machine learning techniques: A comparative analysis. In: 2017 International Conference on Computing Networking and Informatics (ICCNI). Lagos, Nigeria (pp. 1–9). https://doi.org/10.1109/ICCNI.2017.8123782 DOI: https://doi.org/10.1109/ICCNI.2017.8123782
View in Google Scholar
Bremer, C. & Dmitracova, O. (2011, August 8). Analysis: France, Britain AAA-ratings under scrutiny. Reuters. https://www.reuters.com/article/us-crisis-ratings-idUS-TRE7773KG20110808
View in Google Scholar
Chen, J. J. (2022). Wirecard. In: J. J. Chen, International Cases of Corporate Governance (pp. 67–82). Palgrave Macmillan. https://doi.org/10.1007/978-981-19-3238-0 DOI: https://doi.org/10.1007/978-981-19-3238-0_5
View in Google Scholar
Chih, H.-L., Shen, C.-H., & Kang, F.-C. (2008). Corporate social responsibility, investor protection, and earnings management: Some international evidence. Journal of Business Ethics, 79(1–2), 179–198. https://doi.org/10.1007/s10551-007-9383-7 DOI: https://doi.org/10.1007/s10551-007-9383-7
View in Google Scholar
Cohn, A., Fehr, E., & Marechal, M. A. (2014). Business culture and dishonesty in the banking industry. Nature, 516(729), 86–89. https://doi.org/10.1038/nature13977 DOI: https://doi.org/10.1038/nature13977
View in Google Scholar
Czakon, W. (2011). Metodyka systematycznego przeglądu literatury. Przegląd Organizacji, 3(854), 57–61. https://doi.org/10.33141/po.2011.03.13 DOI: https://doi.org/10.33141/po.2011.03.13
View in Google Scholar
Dobers, P., & Halme, M. (2009). Corporate social responsibility and developing countries. Corporate Social Responsibility and Environmental Management, 16(5), 237–249. http://dx.doi.org/10.1002/csr.212 DOI: https://doi.org/10.1002/csr.212
View in Google Scholar
FATF (Financial Action Task Force). (2012, updated in March 2022). International stand- ards on combating money laundering and the financing of the terrorism & proliferation. The FATF Recommendations. Paris. https://www.fatf-gafi.org/content/dam/fatf-gafi/recommendations/FATF%20Recommendations%202012.pdf.coredownload.inline.pdf
View in Google Scholar
Farber, D. B. (2005). Restoring trust after fraud: Does corporate governance matter? The Accounting Review, 80(2), 539–561. http://www.jstor.org/stable/4093068 DOI: https://doi.org/10.2308/accr.2005.80.2.539
View in Google Scholar
Fich, E. M., & Shivdasani, A. (2007). Financial fraud, director reputation, and shareholder wealth. Journal of Financial Economics, 86(2), 306–336. https://doi.org/10.1016/j.jfineco.2006.05.012 DOI: https://doi.org/10.1016/j.jfineco.2006.05.012
View in Google Scholar
Fligstein, N., & Roehrkasse, A. F. (2016). The causes of fraud in the financial crisis of 2007 to 2009: Evidence from the mortgagebacked securities industry. American Sociological Review, 81(4), 617–643. https://doi.org/10.1177/0003122416645594 DOI: https://doi.org/10.1177/0003122416645594
View in Google Scholar
Graham, J. R., & Jiaping Qiu, S. L. (2008). Corporate misreporting and bank loan contracting. Journal of Financial Economics, 89(1), 44–61. DOI: https://doi.org/10.1016/j.jfineco.2007.08.005
View in Google Scholar
Hodson, D. (2017). Eurozone governance in 2016: The Italian banking crisis, fiscal flexibility and Brexit (plus plus plus). Journal of Common Market Studies, 55, 118–132. DOI: https://doi.org/10.1111/jcms.12602
View in Google Scholar
Hoffmann, A. O. I., & Birnbrich, C. (2012). The impact of fraud prevention on bank-customer relationships: An empirical investigation in retail banking. International Journal of Bank Marketing, 30(5), 390–407. https://doi.org/10.1108/02652321211247435 DOI: https://doi.org/10.1108/02652321211247435
View in Google Scholar
Hohberger, S., Priftis, R., & Vogel, L. (2019). The macroeconomic effects of quantitative easing in the euro area: Evidence from an estimated DSGE model. Journal of Economic Dynamics and Control, 108, 103756. https://doi.org/10.1016/j.jedc.2019.103756 DOI: https://doi.org/10.1016/j.jedc.2019.103756
View in Google Scholar
Jayech, S. (2016). The contagion channels of July–August-2011 stock market crash: A DAG- copula based approach. European Journal of Operational Research, 249(2), 631–646. https://doi.org/10.1016/j.ejor.2015.08.061 DOI: https://doi.org/10.1016/j.ejor.2015.08.061
View in Google Scholar
Karpoff, J., Lee, D., & Martin, G. (2008a). The cost to firms of cooking the books. Journal of Financial and Quantitative Analysis, 43(3), 581–611. https://doi.org/10.1017/S0022109000004221 DOI: https://doi.org/10.1017/S0022109000004221
View in Google Scholar
Karpoff, J., Lee, D., & Martin, G. (2008b). The consequences to managers for financial misrepresentation. Journal of Financial Economics, 88(2), 193–215. https://doi.org/10.1016/j.jfineco.2007.06.003 DOI: https://doi.org/10.1016/j.jfineco.2007.06.003
View in Google Scholar
Kirkos, E., Spathis, C., & Manolopoulos, Y. (2007). Data mining techniques for the detection of fraudulent financial statements. Expert Systems with Applications, 32(4), 995–1003. DOI: https://doi.org/10.1016/j.eswa.2006.02.016
View in Google Scholar
Li, Z. Z., Tao, R., Su, C. W., & Lobonţ, O. R. (2019). Does Bitcoin bubble burst? Quality&Quantity, 53, 91–105. https://doi.org/10.1007/s11135-018-0728-3 DOI: https://doi.org/10.1007/s11135-018-0728-3
View in Google Scholar
Lou, Y. I. & Wang, M. L. (2009). Fraud risk factor of the fraud triangle assessing the likelihood of fraudulent financial reporting. Journal of Business & Economics Research, 7(2), 61–78. DOI: https://doi.org/10.19030/jber.v7i2.2262
View in Google Scholar
Mangala, D., & Soni, L. (2023). A systematic literature review on frauds in banking sector. Journal of Financial Crime, 30(1), 285–301. https://doi.org/10.1108/JFC-12-2021-0263 DOI: https://doi.org/10.1108/JFC-12-2021-0263
View in Google Scholar
Matakovic, I. C. (2022). Crypto-assets illicit activities: Theoretical approach with empirical
View in Google Scholar
review. International E-Journal of Crimial Sciences, 17, 1–39.
View in Google Scholar
Mazur, Z. & Orłowska, A. (2018). Jak zaplanować i przeprowadzić systematyczny przegląd literatury. Polskie Forum Psychologiczne, 23(2), 235–251. https://doi.org/10.14656/ PFP20180202
View in Google Scholar
Miglionico, A. (2019). The restructuring of Monte dei Paschi di Siena. A controversial case in the EU bank resolution regime. European Business Law Review, 30(3), 469–485. https://doi.org/10.54648/eulr2019021 DOI: https://doi.org/10.54648/EULR2019021
View in Google Scholar
Monamo, P., Marivate, V., & Twala, B. (2016). Unsupervised learning for robust Bitcoin fraud detection. In: H. S. Venter, M. Loock, M. Coetzee, M. Eloff, & J. H. P. Eloff (Eds.), 2016 Information Security for South Africa (ISSA), IEEE, (pp. 129–134). https://doi.org/10.1109/ISSA.2016.7802939 DOI: https://doi.org/10.1109/ISSA.2016.7802939
View in Google Scholar
Moro, S., Cortez, P., & Rita, P. (2015). Business intelligence in banking: A literature analy- sis from 2002 to 2013 using text mining and latent Dirichlet allocation. Expert Systems with Applications, 42(3), 1314–1324. https://doi.org/10.1016/j.eswa.2014.09.024 DOI: https://doi.org/10.1016/j.eswa.2014.09.024
View in Google Scholar
Ngai, E.W.T., Hu, Y., Wong, Y.H., Chen, Y., & Sun, X. (2011). The application of data mining techniques in financial fraud detection: A classification framework and an academic review of literature. Decision Support Systems, 50(3), 559–569. https://doi.org/10.1016/j.dss.2010.08.006 DOI: https://doi.org/10.1016/j.dss.2010.08.006
View in Google Scholar
Passas, N. (2016). Informal payments, crime control and fragile communities. In: C. Beer, E. Gnan, & U. W. Birchler (Eds.), Cash on Trial (pp. 74–82). Société Universitaire Européenne de Recherches Financières (SUERF) – The European Money and Finance Forum.
View in Google Scholar
Price, M. & Norris, D. M. (2009). White-collar crime: Corporate and securities and commodities fraud. Analysis and commentary. The Journal of the American Academy of Psychiatry and the Law, 37(4), 538–544.
View in Google Scholar
Ravisankar, P., Ravi, V., Raghava Rao, G., & Bose, I. (2011). Detection of financial statement fraud and feature selection using data mining techniques. Decision Support Systems, 50(2), 491–500. https://doi.org/10.1016/j.dss.2010.11.006 DOI: https://doi.org/10.1016/j.dss.2010.11.006
View in Google Scholar
Reurink, A. (2016). Financial fraud: A literature review. Max Planck Institute for the Study of Societies. https://doi.org/10.1002/9781119565178.ch4 DOI: https://doi.org/10.1002/9781119565178.ch4
View in Google Scholar
Segal, S. Y. (2016). Accounting frauds – review of advanced technologies to detect and prevent frauds. Economics and Business Review, 2(4), 45–64. https://doi.org/10.18559/ebr.2016.4.3 DOI: https://doi.org/10.18559/ebr.2016.4.3
View in Google Scholar
Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of Business Research, 104, 333–339. https://doi.org/10.1016/j.jbusres.2019.07.039 DOI: https://doi.org/10.1016/j.jbusres.2019.07.039
View in Google Scholar
Stavárek, D. (2013, June). Lessons learned from the 2013 banking crisis in Cyprus. In: European Financial Systems 2013: Proceedings of the 10th International Scientific Conference. 10-11 June 2013, Telč, Czech Republic (pp. 312–319). Masarykova univerzita nakladatelství.
View in Google Scholar
Tayan, B. (2019). The Wells Fargo cross-selling scandal. Rock Center for Corporate Governance at Stanford University Closer Look Series: Topics, Issues and Controversies in Corporate Governance No. CGRP-62 Version, 2, Stanford University Graduate School of Business Research Paper, No. 17–1, 1–16. https://ssrn.com/abstract=2879102
View in Google Scholar
Tomasic, R. (2011). The financial crisis and the haphazard pursuit of financial crime. Journal of Financial Crime, 18(1), 7–31. https://ssrn.com/abstract=1806493 DOI: https://doi.org/10.1108/13590791111098771
View in Google Scholar
Trozze, A., Kamps, J., Akartuna, E. A., Hetzel, F. J., Kleinberg, B., Davies, T. & Johnson, S. D. (2022). Cryptocurrencies and future financial crimes. Crime Science, 11(1), 1–35. https:// doi.org/10.1186/s40163-021-00163-8 DOI: https://doi.org/10.1186/s40163-021-00163-8
View in Google Scholar
Wilkowicz, Ł. (2021, July 19). Banki ubiegły rok skończyły na minusie. Pierwsza taka stra- ta od ponad ćwierć wieku. Dziennik Gazeta Prawna. https://finanse.gazetaprawna.pl/ artykuly/8211331,banki-wyniki-finansowe-analiza-straty-rezerwy-frankowe.html
View in Google Scholar
Yeoh, P. (2020). Banks’ vulnerabilities to money laundering activities. Journal of Money Laundering Control, 23(1), 122–135. https://doi.org/10.1108/JMLC-05-2019-0040 DOI: https://doi.org/10.1108/JMLC-05-2019-0040
View in Google Scholar
Zahra, S. A., Priem, R. L., & Rasheed, A. A. (2005). The antecedents and consequenc¬es of top management fraud. Journal of Management, 31(6), 803–828. https://doi.org/10.1177/0149206305279598 DOI: https://doi.org/10.1177/0149206305279598
View in Google Scholar
Downloads
Published
Issue
Section
License
Copyright (c) 2024 Marek Kot
This work is licensed under a Creative Commons Attribution 4.0 International License.
The Research Papers in Economics and Finance (REF) is committed to open access. All of the REF` s paper are free to access immediately from the date of publication. There are no author charges, known as APCs, before release, and no charge for any reader to download articles.
The Creative Commons Attribution 4.0 International license (CC BY 4.0) applies to articles published in Research Papers in Economics and Finance from Vol. 4, No. 3, 2020 to present. This license is acceptable for Free Cultural Works. You are free to share and adapt. You must give appropriate credit, provide a link to the license, and indicate if changes were made.
The Attribution-NonCommercial 4.0 International license (CC BY-NC 4.0) applies to articles published in Research Papers in Economics and Finance up to Vol. 4, No. 2, 2020 inclusive. You are free to share and adapt. You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may not use the material for commercial purposes.
How to Cite
EDITORIAL OFFICE: Department of Business Activity and Economic Policy, Instittue of Economics, Poznań University of Economics and Business, al. Niepodległości 10, 61-875 Poznań, Poland, room 621a Alltum, 