The responsibility for preventing fraud is often seen as belonging to:
A) The internal auditors
B) Corporate security
C) The external auditors
D) Managers
E) Someone else

Question

Quizplus · Accepted Answer

A: A is incorrect because the internal auditors argue that their function is to evaluate controls and to improve operational efficiency. They will support a fraud investigation, but it isn't their primary responsibility.
B: B is incorrect because corporate security believes that theirs is an investigative role and that they are responsible for pursuing reported frauds, not deterring them. They don't focus on prevention or detection.
C: C is incorrect because the external auditors maintain that they can't detect fraud because it isn't their responsibility and because their materiality levels are too high.
D: D is incorrect because managers view their primary responsibility as "running the business" and seldom acknowledge the possibility that fraud can occur in their organization.
E: E is the correct answer.

The Responsibility for Preventing Fraud Is Often Seen as Belonging