Question

Why are managers reluctant to engage in the discovery process?

A. They fear uncovering misconduct could harm the firm's reputation.
B. They are required to hire outside auditors, which is costly.
C. Discovery forces leaders to acknowledge financial losses.
D. Discovery usually involves having to lay off employees.
E. Most discovery mechanisms are ineffective in detecting misconduct.

Answer 1

Managers may be reluctant to engage in the discovery process due to fear of harming the firm's reputation, the costly hiring of outside auditors, the need to acknowledge financial losses, potential layoffs, and ineffective detection mechanisms.

Step-by-step explanation:

Managers may be reluctant to engage in the discovery process for several reasons:

1. Fear of harming the firm's reputation: Managers may be hesitant to uncover misconduct because they fear it could harm the firm's reputation, especially if the misconduct becomes public knowledge.
2. Costly hiring of outside auditors: Engaging in the discovery process often involves hiring outside auditors, which can be a costly process for the firm.
3. Acknowledgment of financial losses: The discovery process may force managers to acknowledge and address financial losses or other forms of mismanagement within the organization.
4. Layoffs: In some cases, discovery can result in the need to lay off employees, which managers may be reluctant to do due to the impact on the workforce.
5. Ineffective detection mechanisms: Managers may be reluctant to engage in the discovery process if they believe that the available mechanisms are ineffective in detecting misconduct.