Who Blows The Whistle On Corporate Fraud?

What external control mechanisms are most effective in detecting corporate fraud? To address this question this paper studies in depth all reported cases of corporate fraud in companies with more than 750 million dollars in assets between 1996 and 2004. It's found that fraud detection does not rely on one single mechanism, but on a wide range of, often improbable, actors. Only 6% of the frauds are revealed by the SEC and 14% by the auditors. More important monitors are media (14%), industry regulators (16%), and employees (19%). Author found that monetary incentives for detection in frauds against the government influence detection without increasing frivolous suits, suggesting gains from extending such incentives to corporate fraud more generally.