Survey shows that there is a significant rise in public distrust for both individual brands and corporate in Australia since 2020 due to the misconduct of corporate Australia under the 'cover of the Covid-19 pandemic' (Morgan 2023). The issue of corporate distrust worsened in 2023 as consumers experienced economic uncertainty and struggled with corporate scandals and data breaches (Morgan 2023). The successive scandals had led to concern on moral bankruptcy of corporate Australia (McCarthy 2023). As stated by Watts, Maniam & Leavell (2018), impacts of corporate scandals have wide-ranging effects on various aspects of the society, thus further studies on corporates scandals and its impacts are crucial to enable society to detect possible causes, recognise indicators of fraud and hopefully prevent scandals from happening. Although several researches have been done on this topic, but there is limited discussion in the context of Australia. Hence, study on this topic in the context of corporate in Australia is essential to assist policymakers, investors, consumers and other stakeholders in detecting and preventing corporate scandals in Australia. 2. Research Questions & Objectives The aim of the study is to determine by what extent the shares of scandal-hits companies in Australia is affected by their corporate scandals and how will these impacts differs between different industries. 2.1. Research Question: i) What is the impact of corporate scandal on share price of scandal-hit companies in Australia? ii) How will the impact of corporate scandal on share price of scandal-hit companies in Australia differ between industries? In alignment with the research questions, this study seeks to achieve the subsequent objectives: 2.2. Research Objectives: i) To identify the share price movement and volatility of scandal-hit companies in Australia before and after their scandals are aired publicly ii) To compare the impacts of corporate scandal on share price of scandal-hit companies in different industries in Australia 3. Conceptual Framework Corporate scandals have been previously identified as the definitive source of the main force for change in share prices and changes in investors' feelings and sentiments. Through the comprehensive examination that (Firmansyah et al. 2020) undertook, the authors proved the multi-faceted character of corporate scandals through the finances, economics, and behavioural organizational perspectives. In their research, Firmansyah, and his team (2020) argue that such corporate scandals usually depict situations in which fraud, which is the main ethical lapse, and breaches of the law are involved. Further, the researchers find out the wider consequences that corporate scandals are having on investor sentiment and market stability. However, (Firmansyah et al. 2020) suggest that a scandal, being made up of negative news about (company) can erode investor confidence, contribute to the risk-taking behaviour of the investors, and ultimately lead to heightened volatility and trading activity in affected securities. Through the examination of how the market behaved towards a variety of corporate scandals disclosed across many different industries and regions worldwide, Firmansyah and co-authors (2020) share important perspectives about the workings that are responsible for the way investors respond to such revelations. Summing up, Firmansyah et al. (2020) examines the surprisingly complex web of relations between corporate scandals, investor sentiment, and share prices, demonstrating that for well-direct companies, ethical principles, and proactive risk management measures for smart and sustainable business are very crucial for shareholders' value as well as market integrity in times of today's dynamic business environment, and this is good. Soltani (2014) and Zahra et al. (2007) provide valuable perspectives on the impact of corporate scandals on stock prices. According to Soltani's comparative study, corporate fraud significantly affects the market and can have a ripple impact on industry spillovers and stock price movements. The study emphasizes how scandal exposure can have an instant negative impact on market value and shareholder trust. The effects of top management fraud are also examined by Zahra et al. (2007), who emphasize how detrimental it is to the financial performance and reputation of the organization. The qualitative research indicates that corporate scandals might lead to an adverse impact in investor sentiment, which can lower share prices and market capitalization. Jory et al. (2015) investigated market reaction to both financial and non-financial corporate scandals involving CEOs in the US between 1993 to 2011 by looking into the effects of misconduct of a firm's CEO on stock market performance. Result of the study suggest that investors respond negatively to the announcement of corporate scandals whereby the stock price of the firms dropped significantly after the misconduct was disclosed and their stock price volatility increased in the days following the announcement. However, findings also show that the effect is confined to the short-run as the performance of those firms matches the performance of other scandal-free firms in the long-run and some even outperformed. Hence, shareholders are benefited by the corrective actions taken by the scandal-hit firms in the long run. Although this study shows that scandals have limited impacts on stock-market performance of the scandal-hit firm in the long-run, it is still crucial to find out the impact of scandals in the short-term as not all firms can survive through the damage associated with corporate scandals in the short-terms. 3.1. Variables Table Types of Variables Variable Name References & Rationale for Investigation Dependent Variable Share Price Movement Jory et al. (2015), Firmansyah et al. (2020), Soltani (2014), Zahra et al. (2007) Share Price Volatility Jory et al. (2015), Firmansyah et al. (2020) Independent Variable Corporate Scandal Jory et al. (2015), Firmansyah et al. (2020), Soltani (2014), Zahra et al. (2007) 3.2. Hypotheses The following hypothesis statements were formulated to analyse the impacts of corporate scandals on share price of scandal-hit companies and how the impact differs between different industries. H1: Corporate scandal negatively affects share price movement of scandal-hit companies in Australia. H2: Corporate scandal negatively affects share price volatility of scandal-hit companies in Australia. H3: The magnitude of share price decline for scandal-hit companies in Australia differs due to differences in industry characteristics. Share Price Movement H1 H2 Corporate Scandal Share Price Volatility 4. Research Design 4.1. Research Design 4.1.1. Research Method Given the quantitative nature of the study and the aim to analyze the impact of corporate scandals on share prices, a longitudinal research design may seems more suitable. This design allows for the observation of share price movement over time, both before and after the occurrence of corporate scandals. However, due to the limited access to long-term data and the findings from literature reviews suggesting that corporate scandal only has short-term effects on company's share price, the research only used historical share price of the selected companies over a one-year period. A statistical analysis will be conducted to compare the share price movement of scandal-hit companies before and after the scandal using MS Excel. In addition, a comparative analysis will then be conducted to compare the impacts of scandals between the two companies in order to find out how the impacts differs between airline industry and banking industry. 4.1.2. Data Collection Method The data for this study was collected through secondary sources, primarily Yahoo! Finance. This platform provides historical share price data for various companies listed on the Australian Stock Exchange. Secondary data collection from Yahoo! Finance ensures access to reliable and comprehensive share price data for the selected companies. Data set A measures the share price of Qantas Airways over a one-year period (6-months before scandal and 6-months after scandal), which is between February 2023 to February 2024. Meanwhile, data set B measures the share price of Westpac Bank over a one-year period (6-months before scandal and 6-months after scandal), from May 2019 to May 2020. 4.1.3. Sampling Two companies were selected as case studies to represent different industries in Australia. Qantas Airways was chosen to represent the aviation industry, while Westpac Bank was chosen to represent the banking sector. These companies were selected based on their significant presence in their respective industries and the availability of comprehensive share price data. The choice of Qantas Airways and Westpac Bank as case studies provides insights into the impact of scandals across different industries, enhancing the generalizability of the findings 4.2. Data Analysis 4.2.1. Descriptive Statistics First of all, descriptive statistics are used to describe the share price movement and volatility of the selected companies before and after the scandals. Before Scandal After Scandal Difference Mean (Average Share Price) 6.45 5.32 -17.54% Standard Deviation of Share Price 0.170 0.263 54% Table 1: Descriptive Statistics for Qantas Airways As shown in Table 1, descriptive statistics for Qantas Airways's share prices before and after the corporate scandal reveal significant changes in both the central tendency and variability of the share prices. The mean share price decreased significantly, by AUD1.13, after the scandal, indicating a negative impact on the value of the company's shares. A 17.54% reduction is substantial, suggesting that investors reacted negatively to the scandal. Investors might be selling off their shares fearing the possible financial and reputational impacts on the company, which reduces the stock price. The increase in standard deviation indicates that the share prices became more volatile after the scandal. An increase in volatility typically reflects higher uncertainty or risk perceived by the investors. This could be due to varying expectations about the company's future, legal repercussions, financial stability, or possible changes in management. Both the decrease in the average share price and the increase in price volatility post-scandal suggest a significant impact of the scandal on Qantas Airways. Before Scandal After Scandal Difference Mean (Average Share Price) 22.77 17.10 -24.90% Standard Deviation of Share Price 0.753 3.675 388.23% Table 2: Descriptive Statistics for Westpac Bank As shown in Table 2, the mean share price experienced a sharp drop of nearly 25% following the scandal. This large decrease generally reflects a significant loss of investor confidence, which could stem from fears about potential financial repercussions such as fines, legal costs, the costs of regulatory compliance enhancements, and a potential decline in business due to reputational damage. he dramatic increase in standard deviation indicates an extremely heightened level of volatility. A 388.23% rise in the standard deviation is indicative of a highly unstable stock price, reflecting significant uncertainty and risk perceived by investors. This volatility might be driven by ongoing news and developments related to the scandal, mixed reactions from investors, speculative trading, and potential regulatory investigations or sanctions. The data clearly indicates that the corporate scandal had a detrimental impact on Westpac Bank's share prices, leading to a substantial decrease in market valuation and a significant increase in share price volatility. 4.2.2. Visual Analysis Diagram 2: Qantas's Share Price After Scandal Diagram 1: Qantas's Share Price Before Scandal As shown in Diagram 1 and Diagram 2, Qantas's share price was stable with minor fluctuation before the corporate scandal. However, the share price had fallen after the scandal and shown a falling trend from September 2023 to November 2023. Qantas's share price started to rise again from November 2023, suggesting that the corporate scandal may have limited impacts on the company's share price. Diagram 4: Westpac's Share Price After Scandal Diagram 3: Westpac's Share Price Before Scandal Based on Diagram 3 and Diagram 4, Westpac's share price was stable with minor fluctuation before the corporate scandal. Although Westpac's share price had fallen after the scandal, but it still maintained a relatively stable trend from December 2019 to March 2020. However, the company's share price fell drastically between March 2020 to April 2020 and continued to be stable after that. This trend suggests that although Westpac's share price was affected by its scandal, the impact was limited. The significant fall of the company's share price requires further investigation to find out the true cause. 4.2.3. Comparative Analysis Banking & Airline Industry Qantas's Difference Westpac's Difference Difference Between the Two Companies Mean (Average Share Price) -17.54% -24.90% 7.26% Standard Deviation of Share Price 54% 388.23% 334.23% Westpac Bank's average share price experienced a more significant decline compared to Qantas Airways, suggesting that the market perceived Westpac's scandal as having a greater negative impact on shareholder value than Qantas's scandal. This could be due to the nature of the scandals, the severity of the repercussions, or differences in investor perceptions of the industries or companies. The volatility of Westpac Bank's share price increased dramatically compared to Qantas Airways, with the standard deviation rising by over 334% more than Qantas. This indicates that the market perceived Westpac's scandal as introducing significantly more uncertainty and risk into the stock, possibly due to concerns about legal liabilities, regulatory actions, and the overall stability of the bank. While both companies experienced negative impacts on their average share prices and increased volatility following their respective scandals, Westpac Bank appears to have faced a more severe reaction from the market in terms of both the decline in average share price and the increase in share price volatility. The larger declines in average share price and higher increase in volatility for Westpac Bank suggest that investors perceived its scandal as more damaging or riskier compared to Qantas Airways' scandal. 5. Result & Findings The comparative analysis highlights the differing market reactions to the scandals faced by Qantas Airways and Westpac Bank. While both companies experienced negative effects on their share prices and increased volatility, Westpac Bank appears to have been more severely impacted in terms of both metrics. This could have implications for investor sentiment, long-term market performance, and the companies' strategies for addressing and recovering from the scandals. Based on the descriptive statistics and the visual analysis in share price movements and volatility for Qantas Airways and Westpac Bank, the three hypotheses are supported: H1: Corporate scandal negatively affects share price movement of scandal-hit companies in Australia. The hypothesis is supported as both companies registered significant declines in their share prices following their respective scandals, demonstrating a clear negative impact on share price movements. As Qantas Airways experienced a decrease in average share price of 17.54% following the scandal and Westpac Bank saw an even larger decrease of 24.90% in its average share price post-scandal. Both instances clearly indicate a negative effect on share price movement post-scandal. H2: Corporate scandal negatively affects share price volatility of scandal-hit companies in Australia. This hypothesis is also supported. The marked increases in share price volatility following the scandals illustrate heightened market uncertainty and risk perceptions associated with the scandal-hit companies. While Qantas Airways showed an increase in the standard deviation of its share price from 0.170 to 0.263 (54% increase), indicating heightened volatility, Westpac Bank exhibited an even more pronounced increase from 0.753 to 3.675 in standard deviation (388.23% increase), signaling very high volatility. The substantial increases in volatility for both companies after scandal clearly show a negative impact on share price stability. H3: The magnitude of share price decline for scandal-hit companies in Australia differs due to differences in industry characteristics. This hypothesis is supported as well. The differences in the magnitude of share price decline and the change in volatility between the two companies, likely influenced by their respective industries, align well with the hypothesis. In terms of the magnitude of decline, Westpac Bank's share price fell by 24.90%, whereas Qantas Airways' fell by 17.54%, showing a difference in the impact magnitude. On the other hand, for volatility increase, the difference in the increase in volatility was also significant, with Westpac Bank's volatility increasing by over 334% more than Qantas's. These differences can be attributed to industry characteristics where financial institutions like Westpac might face harsher penalties and stricter regulatory scrutiny compared to aviation companies like Qantas, influencing investor reactions more strongly. Can you please help me with the recommendation and conclusion part according to this report. Can you provide like maybe four recommendation