Negative Impact of Job Losses and Reputation Damage

Employees also suffer the consequences of fraud, as they may face job termination and a tarnished reputation. In the aftermath of the WorldCom scandal, approximately 30,000 individuals lost their jobs, and investors incurred losses of approximately $180 billion. The effects of fraud on employees can be long-lasting, with unfavorable publicity, decreased trust, and difficulty securing future employment.

Creating a culture of transparency and ethics within a company can help mitigate the risk of fraud and its consequences on employees. By fostering an environment that encourages open communication and reporting of suspicious activities, organizations can reduce the likelihood of fraud and protect the well-being of their employees.