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 …

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 …

We estimate what percentage of firms engage in fraud and the economic cost of fraud. Our estimates are based on … detected frauds, and frauds that we infer are started but are not caught. To identify the ‘iceberg' of undetected fraud we take … advantage of an exogenous shock to the incentives for fraud detection: Arthur Andersen's demise, which forces companies to …

We provide a lower-bound estimate of the undetected share of corporate fraud. To identify the hidden part of the … 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 …