Speaker is studying fraud in large corporations; thinks something like 10% of large corporations engage in actionable fraud. Fun, fun, fun. [I mean, obviously there are strong incentives for corporations to do this, given that in his estimate only 1/2 get caught. But still… 10% is a lot.]
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depressing thought from law and econ seminar today
(email anonymous for a reason)
As I’ve become aware of generally, “questionable” doesn’t mean very much. In most businesses I’m aware of, “questionable” things have always been done as long as they are morally conscionable.
For instance, faking up “silly” documentation asked for by an auditor, such as how many hours of your development time is spent doing
development versus maintence for making a financial statements.
Me, being a programmer, I don’t have time to track what amount of my day is spent on such things. I don’t document this stuff. So we make up documentation at audit time. This doesn’t bother me, as I believe the actual harm is minimal. Our guess is “close enough” for anybody’s purposes. And the time that would be wasted is immense.
But the SEC requires it. The SEC requires a lot of new stuff which is doing little more than make people jump through hoops.
It becomes a problem when you are misleading people out of their money, or taking advantage of people. If we grossly overstated different amounts for a purpose of misleading somebody for personal gain: that would be a problem.