Why Corporate Fraud Remains Undetected Despite Audits and Regulations?

This article examines why deliberate financial misconduct can remain undetected in organizations that have audits, internal controls and regulatory oversight. It explains the assurance gap between reasonable assurance and the protection stakeholders assume, and discusses five factors: paper controls versus real integrity, management override, the role of whistleblowers, fragmented oversight and collusion, and the divergence between reported earnings and cash flow.