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From the study: > Findings were robust to various empirical measures and additional controls for undetected fraud. Otherwise, I think logic would dictate that

by hrktb 6y ago

From the study: > Findings were robust to various empirical measures and additional controls for undetected fraud. Otherwise, I think logic would dictate that greedy people try to get into bigger companies where decent amount of money is moving. Same for fudging the books, it starts to make sense from a risk perspective if there is a decent amount of transaction to hide fraud in. For too small businesses, fraud will be more limited to not recording events (gifts etc.), and those arguably occur whatever the size of the company. To put it differently, I think big companies will be more of a fraud magnet, and they’ll need super serious effort to guard against it. Those efforts are often not good enough/not incentivized so it’s bound to happen more often.

asdfasgasdgasdg 6y ago
I am curious as to how they could possibly make the findings robust to undetected fraud. It sounds very much like their "experiment" group consists of companies that are more often in the limelight. If the "control" group's members commit fraud at the same rate but are less likely to have it detected because of a relative lack of attention, how could you possible control for that in the study design?
- cycomanic 6y ago
  Note that the article is only about securities fraud. From the abstract I assume they looked at the group that was reported to the SEC for fraud and compared to a random selection of 500 companies and then compared what percentage amongst those two groups were big corporations, growth pressures etc.. Regarding the control for undetected fraud, there could be various methods that one can employ (e.g. when one has some statistics about undetected fraud for example). From the formulation in the abstract I assume that when they apply the controls their findings don't change, so with or without the controls large corporations are more likely to commit fraud.

by hrktb 6y ago

asdfasgasdgasdg 6y ago

I am curious as to how they could possibly make the findings robust to undetected fraud. It sounds very much like their "experiment" group consists of companies that are more often in the limelight. If the "control" group's members commit fraud at the same rate but are less likely to have it detected because of a relative lack of attention, how could you possible control for that in the study design?

cycomanic 6y ago
Note that the article is only about securities fraud. From the abstract I assume they looked at the group that was reported to the SEC for fraud and compared to a random selection of 500 companies and then compared what percentage amongst those two groups were big corporations, growth pressures etc.. Regarding the control for undetected fraud, there could be various methods that one can employ (e.g. when one has some statistics about undetected fraud for example). From the formulation in the abstract I assume that when they apply the controls their findings don't change, so with or without the controls large corporations are more likely to commit fraud.