The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Wed, 15 Jul 2026 16:41:43 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Who Blows the Whistle on Corporate Fraud? – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Who Blows the Whistle on Corporate Fraud? https://corpgov.law.harvard.edu/2010/02/15/who-blows-the-whistle-on-corporate-fraud/?utm_source=rss&utm_medium=rss&utm_campaign=who-blows-the-whistle-on-corporate-fraud https://corpgov.law.harvard.edu/2010/02/15/who-blows-the-whistle-on-corporate-fraud/#comments Mon, 15 Feb 2010 14:02:21 +0000 http://blogs.law.harvard.edu/corpgov/?p=7052?d=20150106105144EST Posted by R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Monday, February 15, 2010
Editor's Note:

This post comes to us from Alexander Dyck, Professor of Finance at the University of Toronto, Adair Morse, Assistant Professor of Finance at the University of Chicago, and Luigi Zingales, Professor of Entrepreneurship and Finance at the University of Chicago.

In our paper, Who Blows the Whistle on Corporate Fraud?, which is forthcoming in the Journal of Finance, we study all reported fraud cases in large U.S. companies between 1996 and 2004 to identify the most effective mechanisms for detecting corporate fraud.

The large and numerous corporate frauds that emerged in the United States at the onset of the new millennium provoked an immediate legislative response in the Sarbanes Oxley Act (SOX). This law was predicated upon the idea that the existing institutions designed to uncover fraud had failed, and their incentives as well as their monitoring should be increased. The political imperative to act quickly prevented any empirical analysis to substantiate the law’s premises. Which actors bring corporate fraud to light? What motivates them? Did reforms target the right actors and change the situation? Can detection be improved in a more cost effective way?

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