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November 14, 2022

You serve on the board of directors of a multinational manufacturing company.

You serve on the board of directors of a multinational manufacturing company. You have just received a whistleblower complaint about one of the senior executives in a subsidiary in another country, where a large production facility is located. The complaint alleges that this senior executive has been understating manufacturing costs to make his production results look better than other company subsidiaries and that would result in a larger year-end bonus for this senior executive.

What are the risks for the company if this fraud is material (significant) to the company’s financial statements?

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