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'h.mn.epsedtrion ol$c ssersjand {n) Falsifi.dioDr rhar e muad by rrr tutrdtrlrnr fin.icirLreponifg, meoidg rlE bash acriod rhr li$ orovokld a rahificarioi olrhc nnan.i(Lsnudionrwa don. inrcnrio.ill, o./and uninI.di.nxLlr. taud i5 sl.o kno\D 6

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I\{.\CNIIUDE O! FRAUDorsoianiois orrllqpcs add st s arc srbj...10 iraud or a nunbrtoaocca\ionr o!{$L rELrex dftades, diajor Nblic contidics hrv. .rpnicnccd fi.Dciat nponids tiud, .htrLLins iirumoiL in rhc U.S. c.pir.l m ko6, r lo$ ot slrrcholdrt valuc, and, ln somc .ars, 0rbtrikrutty ollhc lompany ibclf Allhongh I is genmll] a...rcd hd rhc Strbans o{ky Adhs imprcycd coao.rlc sovcmancc:nd d.crcded rlr f.d.i.e oladud, rccc ndi.s ?Mstrd.l\ indicdc rhd . ro hrvc conc.os rbour nmici.Lu.F.nr ft i; Forcnmph:i Tlr Aso.hrion otccnifird Fr Esmoes. (;\cFrr) r0l0 Rqr

nd rhn rmcalnarnc n:ud, whilc rcprcs.riLrgrduJ in irsrepon.qN by rar rhc no{ ..nrt. I th'

F.di$ 1os olsl.7 miLLioD per ifficatr su .r' prdi.pinr srimMd rrd {h. qrnrtorgrnir.ion losA 5% or ils

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wond Pmdu.! rhG figu.u hNLirss ro I porenrirt t.ojcd.rn aDnRl raud Los orn.cdrai $r.r rirjoi th. Fcdian Losi c $d b), rlc o..dr i.nat riaud.ses i oy ludrLls$l40,000.Moarharotr. fifthorrh.sc!r.s.:redtosdot'h6. mi on.nfniudsreponedrousl iedanEdi&0fi3monrhsbero.eb.idsdcr.drd

, .,FnuduLenr financirr Repodris: 1993-100r," fion $e comfrir.c or sl.n\.ringmhsiotr (rhe 1010 coso rnld Rcpon). hryzi

31? frauds iNsriEared b) rhe u.s s..u .s lnd Exchanee co'rmhsion (s!c) i.om1993 ro 1007 and ldmd rb (he mediai dorrs lmoun{ ofc.ch inn,n.e or raLLd hidinmccd ltuee times 60n ihe lerel ir a sihl!. 1999 nud.r, from a nredni ot sl ImlLrio' in rhe 1999 nudy b srz m rlior Id lddilroi, rh. ncdiin size ollhe comDatr]

A "?009 xr'lr, rr!!r" ol 204 execuriv$ ot U S nr, ru I \ L i unu rucorud !r5150 Diir 0,.!, dr,,r tolnJrhat65 pro of rj(Nnrr\ifduqlfrrrdrobcd

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l(ukih l0 000 cmr o,ees(source Asociariotrolceniried fraud Examiic6,20l0.Repon {o dr ldion ono.cupaiioDrlFdDd and AbNe," pp ?r.19. hrp:/xls.acrc.comrndnln.r0l0.pd1l

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" ".a ,a, .,.* "". .,:r i.*lr lhisco en, P.rson 4a1., (1003) renrkc4,tquir jrndLtrgllndil is sistrtficanlbeqN nis or. orrhc n6r n'jor fiiocid sc!n&ls, vh{e conpdu^ wse usd ro Arisr in p.4ctarjn! r!, .. .P.:.e q o:^,

^blh h6 }irn{sd r ihbq ot ye _kiowD exmpks oriNolriig luge od.prsisjo6.coDp is.ii dsvdoped.

counhns T[. ncdia h6 aponed $aidats ard b$tiuprcies D cotrioaaies. such s. suibeam Kman, En,or, crobs crosi.g (usAl, nccl Masrc, polty p{k (uK) Md rnH hsrcla(Adnlir) said$ sod3ls in developcd .outuhs, $,hich hrrc sotlrislilatd crpirat hrrtusmd rgdario,i. siDilr.a cDb 5rirh Dugi[g,.jruimrket Asi counris: hNe also e -t ts..i Bali md s rkM5 Oro+ (r don{ a), Bmgkok Bmk or con,i!rce (rhaitrd), unired EDcimrts }rhd(_Mrlayslr), sinnLrg Ehdoftr andHyuid.i (Korc.) rhe co{oD1e.otlap*s orlc.en!1im*jcurmi"arii! !i.h mxsive coIrpscs, strch 6, d)osc otEtron D rlrc U s., Hllr in Ausht]4 andsrilD, i, L,dja har sussened irar ihde e. i3lor.r),nemic probhnr facine rhe way jn {r,ilhco'po.arior add cc openr

The E.e hll r.Diile :.countin! :6&h iJivoLri,3 mrlLtr lompui.s *ond*i{lc, !.h as&..xca*f .mun arion paid to some clos hlr rtici qoeiions about (he fldionshfbc'y.di.rrri:r L.ddship, fiimciar in.edires rid rln,n..ii, miscponing (chen. r0r0). Durhil

lenr linanci!L Eponin! mcidenk in rft U s, simiLarcoaoatin rv{al oihr couit !r ol toreisn !d,roc'!

a(ouning na!& qcrc commided blln.iti.s rhd (oo(lord thcr busines* in morc tlu oi!.ounry d mon orftse enlilies aie also lnod oi ! s !o.k crchbg*:Thc lis. ofcolj.rattiariala.c.unr ,g$Ddrh inlheU.S. h exronsiv!. atul eilh oie L!6 rhe cruk olono or i'ot

regulrities. T'ble l ni.rlrA i lmpc ol u.s. .ofrFni.r lMlE/ofrhen frauJr enl fino..l Eponins adiyilies (ts!da*1.

?001) O(6.a, ii,r! trqo.i emariona!compini.s b$ci in.ighr dillcFn!.ontri$ l']vc rlrocommiGd fiiM.lJ accoudr trg tauds.Txbl.r id.nlifi- rh*enine iot.narioniLcompini{ rad,c nauf oJ llie :c.omd's iftgula tls dicy comntrtd (Taub 200r)

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orrq r.adi otjrei6cenr inra{ includc zzzz Bci (1936), ph} Mortr992), c0ndan. fl99rJ.!r'rE Mmgefr.d' (r9e3l, sbbeai' (2002), Patrrlxr c001, aLons wirf a hon or o'h{js." rlt lotrg thr flch.d a nilrcrLm6s h:002 ti rhe rJs

d riig rhrtr Etron andnj forermpiej ir.in 6c fen rtu itr?00: v.ndcom titcde hkro,.lr, rvcaLing rha. man.sfln.nr raudtrt.nrty miskr.d

ea.ni"gs. Anriu A d.rci. woddcon! audilor. ldilcd 10 iorne UStl 15 bittion shinim ot'1.3o\1h{. o

biJ 'xggrssiyc cmingt trsds r.d cnrd iiro numenu! comtL*ranjadions ro ichicve rhos 0.gds " Adhu. atrddsf, r Ndl.tionn a(ou[ig fid, l.r.hrlinc b.svccn conn,Llins md a diring blLtr. Tlr .ollrpf .a hrgc comprtus sond*idr (HtHinstrranc., EnroD, wondcomt have sp..ked livcry irrerce in rhoano!n(oeicddadilo6 rc.civc in.ldilion !o audtu lss.lnllie Aulraik.n!npeidAdderei,1Sl r miLlionloreldn*ni.csandASl.6 mLLLio ror coosullaDcy s ices ro.rlE1q99r1000 fi;in_.nfiriri;l tri t_.noiirjniinijj, ntiG tiicn dered rhd rh. dl. df cxrmal audhotshrs beei $bjed b rrE i flrme ord'e boftd ordircdon ofrlE.o pry As r.nnines (?00i)rac! {hirc rh. EDn,n/An1rc.\cn rdtlionrhip w6 exreme, irsiidicdjoir of hotr 3 rdlrioishio .!n bc.omc so muddLcd rlrar adnor indcp.ndeme n

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resuhron hrvc xppre ty noliced rhe ic.d aor rorcDic a.coldtDs. [o. *ampk, rho sabba.oxhy ^d

(sox). ,hc srxrenc on audhing s,mdtuds4e (sAs -ee, a"d ,h"'tuL" 4;;;",,rAa rm! onteh( Boad (rrc^ou) hare rcr amod 0rc pr-!r* IecouM e idonc^ (corrik d rL, 2005). 1.hc pcAou r.conmc j

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Th. co4io.rc {and,Ls ol rh! t$r L* yca6 qm r a rriocti. nor jd becaui ot ftc cnomL!. orrailufs, bui ahd b..!irsc of6e dkcovery rhar'qusriodab c llcotrfiitrg pEdico v ta.'liorinsidrous md widardrd $xD rrcviody envirioned.,,A d.finil. link blailures d poor cc, rhs, i5 b.giminS ro cmc'!. Fo. ii{rd.c, B.dawi (r00) vcry apllyobrnrs: iAdcLrhi4l;r !xampl., {c siven a very tow?a% rtriDsby tNrlturomtsh ;hokrtsean$ or is cc icorc. tn Eropc, p m.td 3rd Royrt

holJ e3rc nnk.d jn $e botunqudire orconpr(tcs in 6c iDJcx provm!d by covtrmdc. M.rns rnriDa(ionr "simit t],,ltrcoaomrc Liba'l-hadrsu.d.dir tairu'r:frlis5ln rsp.cr orborh woinueding nm,bs or rcsriclra Do* m fiddlng thil poor cc is a teadifg ftdor in poo.rcdomanc.j manipuLared firadcirr .erid, and coeodrtons andrlAulatory bod ies ecurcmlyrryrsrDrMlr'7.rdd.omcr yexiiingd.G$ifrrr.rponingsy$.d. rn lddirion, dhcusion on ie rehvrtrr otto nsic rccodis n d.rccrrs a(ou ingscmdak ha em(Rcd in rcccn. ycir.

'ne iaud .s* danib.d rbov. impLi4 rha. rhes .oaonrlons hive l]inlomatiotr to drn ]rv.{or, bd rd providc appmpriak dndo$rs of y hDedjoN rhd

r cnsn ol confiden.e i. Jinan nt reponiig pd.ri.c andeffedivenas ol cc mcchinisms ccodinsly, a nunber of clnds hrvr b..n .onducrd roprveird,ep.$ibitiry otsimil*scaDdats in the rodhcomins firurc.,