As anyone who has been part of or through a financial audit knows, red flags are fairly common. Most people in large corporations get dragged into an audit at some point so you know what I’m talking about.
Red flags raised by auditors don’t mean there’s fraud. A few flags can mean a lot of things: sloppy records, random stuff, individual stupidity, plus, of course, outright dishonesty.
For example, there are things like this
Surely, just an innocent mistake. Or, plain stupidity. No doubt, they’ll “fix the glitch.”
But a lot of red flags are often a sign of criminal behavior somewhere.
See one cockroach, you know there are more.
One of the flags auditors look for is inordinate populations in the tail of the curves. Numbers that are too random. Or, not random enough – too good to be true.
Or, perhaps anomalies in the distribution. That’s often…
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