> Auditors are taught from the beginning that they do not look for fraud. To be fair, the authors defined fraud very loosely. "As we explain in Section 2, we

> Auditors are taught from the beginning that they do not look for fraud. To be fair, the authors defined fraud very loosely. "As we explain in Section 2, we use the term “fraud” loosely, since what we measure is some form of misconduct or alleged fraud." Auditors are expected only to certify that a company's accounts are a "true and accurate" representation of the company's financial position. Corporate fraud is fantastically expensive to investigate and prosecute; fraud trials sometimes last years, and some fail simply because jurors died of old age. If you don't prosecute crimes, then you are encouraging them; I imagine the incidence of fraud is much greater than the authors estimate.