Is there a pattern to be found in the actions of managers trying to cover up their firm’s wrongdoings? According to this Idea, yes there is: they all tend to engage in the same sort of behaviours, such as exercising stock options more frequently, rarely changing the firm’s auditors, and more. An understanding and awareness of these behaviours can assist shareholders, regulators and other stakeholders notice failures and wrongdoings early and help address problems before disaster hits.
