Corporate Fraud has always been side-lined by our society as the impact of it, is not understood by many. The media has always given more attention to blue-collar crimes as they hold the attention of people more than white collar crimes. Most of the people believe fraud to be a part of business and don’t realise the consequences which will affect them. Being unaware about such topics makes a person vulnerable to these crimes as unlike other crimes, corporate fraud can affect any number of people. The social and economic effects of Corporate Fraud is immeasurable as the number of people affected is enormous. Fraud has been present in our world since time immemorial, even with proper laws corporate fraud has not shown any intention of slowing down. It has quickly spread its wings aggressively affecting our global economy. The influential people are mostly behind these frauds which makes it difficult to detect it or find any evidence relating to it. Hence there is often no conviction in these cases. The prevention of these frauds in the earlier stages is of utmost importance to make sure the company is safe from fraudulent activity. Corporate Fraud is a very serious issue and it should be treated as such before it becomes a norm for employees or executives to participate in unethical ways to gain more money. Some of the cases of Corporate Fraud such as Enron scandal or the Saradha group scam are good examples to understand the seriousness of this crime. This article briefly explains the effect of corporate fraud in our world economy with the help of some well-known corporate frauds which have previously done some serious damage to the respective country’s economy which in turn affected the economy globally.
Authored by A. Keerthikah, SOL, Mumbai University