misconduct correspond with local waves of non-financial corruption, such as political fraud …

What external control mechanisms are most effective in detecting corporate fraud? To address this question we study in … depth all reported cases of corporate fraud in companies with more than 750 million dollars in assets between 1996 and 2004 …. We find that fraud detection does not rely on one single mechanism, but on a wide range of, often improbable, actors …

legal record are more likely to perpetrate fraud. In contrast, we do not find a relation between executives' frugality and … the propensity to perpetrate fraud. However, as predicted, we find that unfrugal CEOs oversee a relatively loose control … environment characterized by relatively high probabilities of other insiders perpetrating fraud and unintentional material …

We quantify the real implications of trade-offs between firm information disclosure and long-term investment efficiency … distort their real investment choices. The model implies a socially optimal level of disclosure regulation that exceeds the … estimated value. Counterfactual analysis reveals that eliminating earnings misreporting completely through disclosure regulation …