Big name corporations more likely to commit fraud

A new study from researchers in universities in three states was released showing large companies, fortune 500 companies those big 'household name brands' are more prone to committing financial fraud smaller struggling companies. Financial fraud includes such things as attempts to manipulate financial markets in a business’ favor by using faulty accounting practices, providing false or incomplete information or otherwise misrepresenting the company’s financial status.

news.wsu.edu...

Fortune 500 firms with strong growth profiles are more susceptible to “cooking the books” than smaller, struggling companies, according to a recent study published in Justice Quarterly.

Researchers from Washington State University, Pennsylvania State University and Miami University examined the characteristics of more than 250 U.S. public corporations that were involved in financial securities fraud identified in Securities and Exchange Commission filings from 2005-2013. They were then compared to a control sample of firms that were not named in SEC fraud filings.

“Prestigious companies, those that are household names, were actually more prone to engage in financial fraud, which was very surprising,” said Jennifer Schwartz, WSU sociologist and lead author on the study. “We thought it would be companies that were struggling financially, that were nearing bankruptcy, but it was quite the opposite. It was the companies that thought they should be doing better than they were, the ones with strong growth imperatives–those were the firms that were most likely to cheat.”

Corporate financial securities fraud involves attempts to manipulate financial markets in a business’ favor by using faulty accounting practices, providing false or incomplete information or otherwise misrepresenting the company’s financial status.

This might not seem too surprising. But, let's take a moment to consider now this in context with the recent revelations about said fortune 500 companies being heavily involved in swaying the results of the election.

Companies prone to lying and committing fraud are telling us they are the only true sources of information, told us straight up they are responsible for the election results, tell us all to believe and obey covid measures, tell us to take their vaccine or else.

They needed a study for this?

a reply to: dug88

This is actually one of the concepts that makes the rich rich and the poor poor.

Just as an example... pretend their was a massive storm, which caused an electrical surge. Then two families lost their tv from it... a run of the mill middle class family and a wealthy family.

Now, the middle class family just wants a new tv and don’t feel so entitled, so generally that’s all they’ll claim to the insurance company.

But a wealthy family on the other hand feel highly entitled, so they ain’t just contempt making an insurance claim for a new tv... their going to want to see a profit out of it.

So almost guaranteed, they aren’t just going to have the tv on that insurance claim... they’re going to have everything, from the fridge, washing machine... even the god damn toaster!

lol... the difference between rich and poor is sometimes just due to frame of mind.

a reply to: dug88

It’s not exactly hard to understand why this would be the trend.
Who would be more likely to be caught, the small business with 15 employees or the large one with 1500?

I’ve worked in large companies and it’s extremely easy to lose people in the shuffle and when you base their bonuses on performance it’s incentive to pad a bit here or shuffle a bit there.

a reply to: lakenheath24

We need the facts, for sure.

We know it should raise a red flag

if the Chairman is also the CEO,
If the company is listed on NYSE, and
if its a growing Fortune 500 company.

Three simple questions to narrow the field.

Know any?

One that ticks all the boxes above, but seems only ever to be victim of fraud, is Berkshire Hathaway valued at around $818Bn and employing 319,000 people.

Curiously, the Bill and Melinda Gates Foundation has 50M Berkshire Hathaway shares, roughly 3 ti es as many as the Foundations next biggedt holding, which is in Waste Management.