Analysis of Misconduct Reported by the Royal Commission

Running head: ANALYSIS OF MISCONDUCT REPORTED BY THE ROYAL COMMISSION
Analysis of Misconduct Reported by the Royal Commission:
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1ANALYSIS OF MISCONDUCT REPORTED BY THE ROYAL COMMISSION
Introduction
The Royal Commission in to Misconduct in the Banking, Superannuation and Financial
Services Industry is a Royal commission that is established by the Government of Australia, under
the Royal Commissions Act 1902. This commission is established for the purpose of reducing and
omitting misconduct in financial statement presentation in the banking industry and in financial
services industry. The Royal Commission have submitted its final report on 1st January, 2019,
where various banking frauds and industry misconducts are mentioned. The various frauds in the
Royal Commissions and the ways that will help to inhibit such fraud are mentioned below
(Financial Services Royal Commission, 2009).
Discussion
In the final report of the Royal commission, many types of frauds and misconducts in the
banking and financial services industry is mentioned, out of which the major frauds are -
accounting frauds, bill discounting frauds, cheque kitting, forged or fraudulent documents, forgery
and altered cheques and fraudulent loan applications. Accounting fraud is the most common type of
fraud, where the accountants presents manipulated data and information in the preparation of
annual reports. Other frauds bill discounted frauds or cheque kitting or fraudulent loan applications
are the most common and serious frauds in the banking industry (Khanna & Arora, 2009).
There are many severe misconducts that are mentioned by the Royal Commissions in their
interim final report, case studies. The first case of misconduct is the Aussie home loans broker
misconduct. In the case, the misconduct is done by four former brokers from Aussie Home Loans
Investment Pty Ltd, which includes submission of false documents to the lenders in regard to home
loans applications. The other misconduct mentioned in the report by the commission is the CBA
personal overdrafts. This case states misconduct of data due to programming error. CBA used to
use automated decision making system and a calculator to assess serviceability and risk, but later
during the review, they have discovered a programming error in the system, which resulted to