The use of fidelity bonds protects a company from embezzlement loses and also:
A)Minimizes the possibility of employing persons with dubious records in positions of trust.
B)Reduces the company's need to obtain expensive business interruption insurance.
C)Allows the company to substitute the fidelity bonds for various parts of internal control.
D)Protects employees who made unintentional errors from possible monetary damages resulting from such errors.

Question

Quizplus · Accepted Answer

Fidelity bonds are insurance policies that protect a company from losses due to embezzlement or other fraudulent activities committed by its employees. However, the use of fidelity bonds also has the additional benefit of minimizing the possibility of employing persons with dubious records in positions of trust. Fidelity bonds often require background checks and screening procedures, which can serve as a deterrent to potential employees who have a history of dishonesty or fraud.

The Use of Fidelity Bonds Protects a Company from Embezzlement