Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series, Issue 4/2011 187 RATIONAL APPROACH FOR THE EFFECTS AND IMPACTS OF FINANCIAL CRISIS IN THE SELECTED DEVELOPED AND DEVELOPING COUNTRIES CAUSED BY THE FRAUDULENT AND MANIPULATED FINANCIAL INFORMATION *Tak Isa **RotariuValentin *PhD Candidate, The Bucharest Academy of Economic Studies (ASE), Bucharest, Romania, isatak23@gmail.com ** PhD Candidate, The Bucharest Academy of Economic Studies (ASE), Bucharest, Romania, rotariu.valentin@yahoo.com ABSTRACT Nowadays the financial crisis is in the news more than it never was before. We must accept that the world face an immense financial crisis. In this decade, financial crises raised significantly caused by the fraudulent and manipulated financial information. Suggestions, discussion, recommendations, bailouts to the insolvency countries relieve the pain a little bit but do not close the wound.This causes the damage of the public trust on financial information produced by the companies` managers. The financial information must provide to the financial information users; accurate, reliable and correct information in order to invest in necessary areas of the economy. Otherwise real economy, indisputably, will be affected by fraudulent and manipulated financial information.This paper attempts to monitor, explain and find out the causes of the effects and damages of financial crisis on countries` economies caused by the fraudulent and manipulated financial information.This study also investigates the reasons for losing the public trust in the financial market. Macroeconomic data is given for developed and developing countries to highlight the importance of the financial information in the real economy. Keywords: financial information, fraudulent,trust, decision, impact. Introduction This paper assesses the importance of the public trust on the financial information and effects on real economies with help of the macroeconomic data. Current study also examines the effects on the public trust of the fraud and the manipulation in the financial information giving some macroeconomic data.Another aim of this study to analyses the public trust in governments. Most of the damages on real economy come from unfair financial statements. In order to avoid from the damages in the economy, each side of the financial information (users and producers of the financial information) must trust each other in the market. Otherwise losing the trust in the capital market may cause loss in the economy and this kind of things cause to suffer the public. Ones the public trust decreased so the collapses in the financial market accelerate and consequences of the manipulation in the financial information may cause loss billions of the dollars as experienced before and in current time. Although the researchers developed the models to predict the fraud or manipulation in the financial information, the financial markets are being affected by the fraudulent and manipulated financial information. First of all, the accounting system prepares the financial information but the inadequate internal control may cause to commit fraud easily in the financial information. Scandals regarding the financial information manipulation in the USA have captured the attention of the public. Billions of dollars in value have been lost, and questions are being asked about how much of that value was real in the first place. After Enron`s bankruptcy the public trust has started to be shaken which is playing very important role to allocate the capital efficiently. This caused to decline the public trust in government so ones the public trust reduced in governments the financial crises was inevitable. 1. Importance of the Financial Fraud in the Financial Markets Providing high quality financial reporting information is important because it will positively influence capital providers and other stakeholders in making investments, loans, and similar resource allocation decisions enhancing overall market efficiency (IASB, 2008). The main objective of the financial information is to present high-quality financial reporting to the users of the financial information to take healthy economic decision. Otherwise fraudulent financial information leads the