BUSI 4500 Advanced Corporate Finance: Functions of Stock Exchange


Case Study

Corporate scandals tend to affect firms, shareholders, the industry and the economy as a whole. It involves aspects such as pollution, misrepresentation of financial statements, fraud, insider trading etc. In the world of corporate finance, these scandals shed light on two important aspects which are behavioural finance and corporate governance. With regards to business, it also highlights the importance of business ethics in the day to day operations of an organisation. Furthermore, in this new era, all stakeholders including customers, suppliers, shareholders and the government have a widened the scope on how they evaluate organisations.
Despite, maximising returns as the main performance indicator, aspects like environmental sustainability, trust and reputation of the firm are also being considered in the decision of whether or not to invest in an organisation. That said, our research paper aims to study in depth the short term effects of corporate scandals by using stock prices and returns. This is because they transform these effects into  tangible, measurable, readily available and time-sensitive values The following research papers provides us with a good foundation  and also highlights areas to direct the focus of our research. The UK essay (2018) elaborates on effects of corporate scandal in the stock market analysed the impacts on stock prices on the KSE-100 index derived from the occurrence of national and international corporate scandals. The Karachi stock exchange was chosen as it was considered an attractive investment opportunity that generated high positive returns. In 2017, it had a positive return of approximately 40.19% which is considered enormous.

What type of data and data sources were used and methodology employed?

What are the major conclusions?

What is the relevance/significance to research in the discipline?

Are there deficiencies?

Are there any important, unanswered research questions arising therefrom that are interesting, significant, and reasonably doable.

How do the articles relate to each other and how do they relate to your research question?

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