Misselling in Business: The Case of Wells Fargo

Gurol Baloglu () and Kaan Ramazan Cakali ()
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Gurol Baloglu: Süzer Grubu, İstanbul, Türkiye
Kaan Ramazan Cakali: Türkiye Kalkınma ve Yatırım Bankası A.Ş., İstanbul, Türkiye

Muhasebe Enstitusu Dergisi - Journal of Accounting Institute, 2023, vol. 0, issue 68, 71-83

Abstract: Case studies have an important place in the field of accounting science. In particular, the frauds perpetrated as a result of weaknesses in corporate governance mechanisms and company failures as a result offer important outputs to all stakeholders, especially regulatory authorities, shareholders, and investors. Wells Fargo is a bank that was founded in 1852 and serves approximately 70 million customers in the US banking industry. Due to the intensely competitive environment and pressure on employees, accounts were opened without the knowledge or approval of customers in their names, especially between 2011-2015, and scandal erupted as a result. The results obtained when analyzing the Wells Fargo scandal show that the profit targets and expectations of the enterprises may cause long-term financial and reputational risks and that mis-selling practices are a significant risk in institutions that generate revenue through sales volume. In addition, the study reveals that ensuring the functionality of internal control mechanisms rather than establishing roles according to the three lines model and that taking into account the risk of fraud is essential in order to provide reasonable assurances during independent audit and internal audit activities.

Keywords: Accounting; Corporate Governance; Wells Fargo JEL Classification : G34; M42; M41 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ist:imeder:v:0:y:2023:i:68:p:71-83

DOI: 10.26650/MED.1224400

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