Arbeitspapier
How pervasive is corporate fraud?
We provide a lower-bound estimate of the undetected share of corporate fraud. To identify the hidden part of the "iceberg," we exploit Arthur Andersen's demise, which triggered added scrutiny on Arthur Andersen's former clients and thereby increased the detection likelihood of preexisting frauds. Our evidence suggests that in normal times only one-third of corporate frauds are detected. We estimate that on average 10% of large publicly traded firms are committing securities fraud every year, with a 95% confidence interval of 7%-14%. Combining fraud pervasiveness with existing estimates of the costs of detected and undetected fraud, we estimate that corporate fraud destroys 1.6% of equity value each year, equal to $830 billion in 2021.
- Sprache
-
Englisch
- Erschienen in
-
Series: New Working Paper Series ; No. 327
- Klassifikation
-
Wirtschaft
Corporate Finance and Governance: General
Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
Business and Securities Law
Accounting and Auditing: General
- Thema
-
Corporate governance
Corporate fraud
Detection likelihood
Cost-beneft analysis
Securities regulation
Arthur Andersen
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Dyck, Alexander
Morse, Adair
Zingales, Luigi
- Ereignis
-
Veröffentlichung
- (wer)
-
University of Chicago Booth School of Business, Stigler Center for the Study of the Economy and the State
- (wo)
-
Chicago, IL
- (wann)
-
2023
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Dyck, Alexander
- Morse, Adair
- Zingales, Luigi
- University of Chicago Booth School of Business, Stigler Center for the Study of the Economy and the State
Entstanden
- 2023
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