On a recent visit to Salt Lake City, Alexander Dyck ordered Chinese takeout and received a branded fortune cookie wishing him wealth and promoting FTX, presumably packaged before the crypto empire’s epic collapse. “I should have saved it,” he said regretfully.
Mr. Dyck is a professor of finance at the University of Toronto, who just published a provocative new study on the pervasiveness of corporate fraud. The study has been passed around in the world of academia in recent weeks, and has become a fascination among general counsels, corporate leaders and investors.
It suggests that only about a third of frauds in public companies actually come to light, and that fraud is disturbingly common. Mr. Dyck and his co-authors estimate that about 40 percent of companies are committing accounting violations and that 10 percent are committing what is considered securities fraud, destroying 1.6 percent of equity value each year — about $830 billion in 2021.
“What people don’t get is how widespread the problem of corporate fraud is,” Dyck said about his study, which was published in the Review of Accounting Studies this month.
Just How Common Is Corporate Fraud? New research by Prof. Alexander Dyck and colleagues via @el72champs @dealbook “What people don’t get is how widespread the problem of corporate fraud is.” https://t.co/pKIrdc3D9r
— Rotman School (@rotmanschool) January 14, 2023