Fraud Detected More Often At Bankrupt Companies

Bankrupt companies are three times more likely to have been cited for fraud by U.S. regulators, according to a study released on Monday from Deloitte Financial Advisory Services LLP. The study also showed that fraud incidents were much more likely to land a company in bankruptcy court.

Sheila Smith, head of reorganization services at Deloitte said it was not clear whether employees at bankrupt companies are more likely to commit fraud or whether the microscope of bankruptcy makes it easier for regulators to detect it.

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