FRAUD AND FINANCIAL MALPRACTICE AS A LENDING FACTOR TO BUSINESS FAILURE

Background of the study: This research work is an attempt to study on fraud and financial malpractice as a leading factor to business failure. Business can be seen as all profit directed towards providing goods and services to mankind. The business organization under usual condition of operation is the result of growth of any business. Individuals are to fill the various positions which will help the organization to achieve its desired objective. Companies are today going through life threatening challenges which are the culmination of several years of a base and mismanagement from their employees. Some of the reason for these anomalies in business trends resulted in the general company down turn, ranging from fraud misappropriation of fund, lack of accountability and general company crises. This write up will advantageously help companies on application of rigidly administered monetary policy instrument of their company.

Fraud is irregularities involving the use of criminal mind to obtain and gain illegal advantages. Fraud involving the manipulation of the records and the accounts usually by the company’s senior officers, with a view to benefit in some way from the false picture which they convey (e.g. Obtaining finance under false pretence, or concealing a material that will worsen the company true position). 

Frauds, usually by employers, involving the theft, misappropriation or embezzlement of the company’s funds, usually in the form of cash, or of its assets (such as goods held in warehouse) Fraud and financial malpractices in many business involving the public sector organization today contributes mostly to one of the sector that lead to business failure.

In all human endeavor and activities, there are usually stories of success and achievement and failures, business are therefore no exemption initially, a motive for setting up a company for economic reasons which are usually taken to be profit maximization objectives. In period of booms as was experienced in mid-seventies during oil boom, making business including the public sector organization thrived in an era of abundance.