Final answer:
The incorrect option about why people hesitate to report fraud is that 'people who report fraud are not rewarded monetarily'. Common real reasons include fear of reprisal, belief that whistleblowing is wrong, and difficulty confirming the fraud.
Step-by-step explanation:
The option that is NOT a reason why people are hesitant to come forward with knowledge or suspicions of fraud is 'people who report fraud are not rewarded monetarily'. While monetary reward may be a factor for some individuals, other factors such as the belief that whistle-blowing is wrong, the fear of reprisal, and the difficulty in being certain about the fraud taking place are more prominent reasons for hesitance. People have various motivations for not reporting misconduct, including self-preservation, social biases, and systemic barriers that discourage whistle-blowing. For example, witnesses might not know the victim personally and therefore feel less compelled to help, based on the findings of Cherry (2020). Bureaucracies can be protective of their reputations and may retaliate against insiders who attempt to expose misconduct or corruption, as highlighted by the fact that individuals may face severe personal and professional consequences for speaking out. Additionally, some instances of fraud, especially statistical fraud, are inherently difficult to detect, thus further complicating the decision to report suspicious activities.