The Financial Impact of Banking Fraud in the UK

By

ACKNOWLEDGEMENT

I would like to thank my supervisor for supporting me throughout my project and giving his valuable suggestions. Finally thanks to all my friends and family for their utmost support and inspiration.

DECLARATION

I, (Your name), would like to declare that all contents included in this dissertation stand for my individual work without any aid, & this dissertation has not been submitted for any examination at academic as well as professional level previously. It also represents my own views & not essentially the ones associated with university.

Signed __________________ Date _________________

ABSTRACT

This study is about the financial impact of banking fraud in UK. The study will elaborate about the various areas of banking and how these frauds can be controlled. It will also elaborate the role of auditing in the fraud minimization. In United Kingdom, the economic disparity is confounding. On one hand there are the poor, the hungry and the desperate; on the other hand there are the rich-and the filthy rich. This divide causes an economic vacuum which often manifests into greater social misconduct. It is also important here to note that many of the problems confronting United Kingdom are self-inflicted due to corrupt leadership across the continent that have systematically siphoned a lot of state monies outside their countries, sometimes in collusion with some agents in the western world. The study will adopt a secondary approach.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background1

Problem statement1

Theoretical framework1

Banking industry in United Kingdom2

Aims and objective of the research3

Research questions3

CHAPTER 2: LITERATURE REVIEW4

The Role of Governments in Banking6

British Politics and Economy7

Impact of theft8

Frauds and financial statements10

Finance and banking frauds12

Fraud in Financial Statements13

Fraud detection19

Affect and its influence on decision making19

Accountability20

CHAPTER 3: METHODOLOGY24

Research design24

The Qualitative Research Design24

Approach of the research25

Data collection25

Resources26

Confidentiality26

Validity26

CHAPTER 4: DISCUSSION28

Causes and characteristics of modern bank fraud28

Types of bank frauds and their impacts32

CHAPTER 5: CONCLUSION37

Fraud and audit functions37

Administrative and operational control38

REFERENCES43

CHAPTER 1: INTRODUCTION

Background

To date very little research has been completed on fraud in the British banking system and its damaging effect on United Kingdom's economy. Most of the research completed concerning fraud depicts its problems in some advanced economies. The assumption that the struggles with and the challenges of fraud in advanced countries and Third World countries are similar is a wrong one. There is a growing need to shine an appreciative light on the challenges and problems of fraud. Therefore this study focuses on the causes and nature of fraud in British Banks (Rosenstein 2004, p.24).

Problem statement

In United Kingdom large scale malpractices, lack of transparency and accountability have become so bad that every bank has become an institution from which the economy is sapped and maimed. We have a situation in our economy where politicians and historians are major functionaries in our banking institutions, simply because there is no professionalism to render. Round-tripping and other unwholesome practices in the system are the order of the way.

Theoretical framework

Some British banks failed and were subsequently liquidated in the 1990s due to malpractices. This lack of transparency and accountability damaged the financial ...