What can be a consequence of failing to report suspected fraud?

Failing to report suspected fraud can lead to significant legal repercussions and financial losses for an organization. When fraud goes unreported, it not only allows the fraudulent activity to continue but can also result in further financial damage, as the initial loss may compound over time. Legal repercussions might arise from regulatory violations or damages stemming from failure to protect stakeholders or comply with the law, potentially leading to lawsuits or penalties. Additionally, the financial losses may impact profitability, damage reputation, and erode trust among employees and clients.

The other options do not accurately reflect the serious nature of the consequences stemming from a lack of reporting. For example, increased employee morale, no impact on company performance, and enhanced team collaboration generally imply positive outcomes, which are unlikely scenarios in the context of ignoring fraud. When fraud is suspected but not reported, it can create an environment of distrust, lower morale, and hinder collaboration, as employees may feel insecure or question the integrity of the organization.