Corporate Scandals: The Unintended Consequences

Student: Amanda Zecca*
Mentor: Karen Cascini
Major: Accounting 

This paper seeks to explore the effect that corporate scandals have on a company’s profitability and reputation by examining several major companies. After researching events that occurred in HSBC, KPMG, Tesco, and GlaxoSmithKline; it has been determined that scandals such as bribery can lead to a decrease in a company’s stock value, a decrease in shareholder interest, and a distrust in the particular industry involved. Also, these scandals tarnish the reputation of the companies involved. After analyzing the outcomes of these cases, it is evident that the consequences in place are not sufficient. This paper recommends the creation of harsher consequences for committing these criminal acts. The fines currently being imposed are insignificant compared to the company’s revenue, and therefore, do not effectively help to prevent corporate scandals.

*Honors Senior