What is the most widely recognized way to deter fraud?
A) Encourage employees to report suspicious activity.
B) Implement a good system of controls.
C) Keep management involved in company procedures.
D) Quickly punish employees found committing fraud.

Question

Quizplus · Accepted Answer

Implementing a good system of controls is the most effective way to deter fraud. This involves having policies, procedures, and guidelines in place to prevent and detect fraudulent activity. It includes internal controls such as segregating duties, having multiple levels of approval, monitoring financial transactions, conducting audits, and performing background checks on employees. Encouraging employees to report suspicious activity and keeping management involved in company procedures are important parts of a good system of controls, but they are not as effective on their own. Quick punishment of employees found committing fraud is important, but it is a reactive measure rather than a proactive one.

What Is the Most Widely Recognized Way to Deter Fraud