In April 2010, a gold mining company, Cahaya Emas was formed.Cahaya Emas had convinced numerous mining experts that they hadrights to one of the largest gold deposits ever discovered. Thegold mine, located on a remote island in the East Coast ofPeninsula Malaysia, supposedly had so much gold that the actualprice of gold on the open market dropped significantly due to theanticipation of an increased gold supply. Within a few months,thousands of Malaysian – big-time investors, pension and mutualfund, managers and many small investors, including factory workers– got caught up in “Gold fever”. The company’s stock price shotfrom pennies to more than $250 per share before a 10-for-1 stocksplit was announced. Thousands of investors believed they were onthe verge of becoming millionaires.
Two years later, the president and CFO, who are also the founder ofthe company were found committing financial statement fraud whichwent on for about two years. The president and the CFO were thefraud perpetrators. Kate, the accountant was aware of the financialstatement fraud being committed by the management of her company,but she never reported it.
As is the case with many frauds of this type, numerous class-actionlawsuits were filed against Cahaya Emas management, alleging thatthey misled the shareholders.

REQUIRED:
A.   Discuss some of the possible reasons for Kate’shesitance to come forward to report the financial statementfraud.
B.   What were some of the perpetrators’ motivations tocommit financial statement fraud?