What Is the Most Likely Outcome When a Company Demotes

question 15

Multiple Choice

What is the most likely outcome when a company demotes the perpetrator but allows him or her to go unprosecuted?

• A) The company will avoid bad publicity.
• B) The perpetrator may commit another fraud in the future.
• C) The perpetrator will be saved from pain and embarrassment.
• D) Management will send a signal that fraud will not be tolerated.

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Definitions:

Expected Value

The weighted average of all possible values that a random variable can take on, weighted by the probabilities of those values.

Payoffs

The outcomes or returns of a decision or action, often expressed in terms of profit or loss.

Risky Undertaking

An action or venture involving a high degree of uncertainty and potential for loss or failure.

Net Profit

The amount of money that remains from revenues after all expenses, taxes, and costs have been subtracted.