Final answer:
The failure to adequately investigate employee fraud can be a violation of legal and regulatory requirements, with potential consequences and financial costs for the company.
Step-by-step explanation:
The statement is true. The failure to adequately investigate an allegation of employee fraud can be a violation of legal and regulatory requirements.
Legislation grants employees the right to make confidential complaints against their employer regarding workplace hazards, illnesses, and endangerment to employee health and safety. If these concerns are substantiated, the company must address the violations or face government-imposed fines.
An example of the consequences of failing to investigate employee fraud is the Firestone/Ford tire controversy in the early 2000s. The investigation into high rates of tire failure, resulting in accidents and fatalities, led to lawsuits, congressional inquiries, and billions of dollars in recalls and costs for Firestone and Ford.