Which item is NOT one of the advantages of voluntary disclosure?

Voluntary disclosure has several strategic benefits for organizations regarding compliance and potential legal ramifications. One significant advantage is goodwill, which refers to the positive reputation and trust that an organization can build through its openness and transparency in addressing any compliance issues. This goodwill can help mitigate negative perceptions and foster better relationships with stakeholders, including regulators and the community.

Limiting the possibility of external investigation is another benefit. When an organization voluntarily discloses issues, it often demonstrates a proactive stance, which can sometimes prevent regulators from initiating a more extensive external inquiry. This proactive approach shows a commitment to compliance that can lead to more favorable treatment.

Additionally, voluntary disclosure can reduce overall damages and penalties, as organizations that take steps to rectify issues before being investigated may be viewed more favorably by authorities. They may receive leniency in penalties and might be credited for their cooperation and efforts in resolving matters promptly.

In contrast, expanding liability penalties is not an advantage of voluntary disclosure. In fact, choosing to disclose issues voluntarily typically aims to lessen potential penalties rather than increase them. Organizations often engage in voluntary disclosure to negotiate lesser consequences, not face additional penalties. Therefore, this choice correctly identifies an element that does not belong among the advantages associated with voluntary disclosure.