THE ROLE OF CREDIT RATING AGENCIES IN PREDICTING FINANCIAL CORPORATE FRAUD: A LITERATURE REVIEW ON EFFECTIVENESS AND INVESTOR PERCEPTIONS.
DOI:
https://doi.org/10.65009/x2zdym65Keywords:
credibility, rating, corporate, investors, credit,,Abstract
Purpose: The aim of this research paper is to critically analyse the contribution of credit rating
agencies in forecasting financial corporate fraud, analysing their efficiency and investigating
investor perceptions. Through the analysis of previous literature, the research intends to
establish areas of gaps in existing knowledge on how credit ratings relate to fraud detection
and whether these agencies can be relied upon as an investor tool. Lastly, the study aims to
offer inputs that can bring greater transparency, accountability, and trust to financial markets.
Design/Methodology/Approach: There exists a large body of literature on the effectiveness
& methodologies and tools utilized by credit rating agencies. This paper intends to synthesize
and carry out a literature review in order to ascertain the determinants of the perceived
credibility of credit rating agencies by investors. The data for the research was gathered from
secondary sources like books, journals, reports etc
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