Eliminating opportunities for fraud includes all of the following except:
A) Installing good internal controls
B) Monitoring employees
C) Alerting vendors and contractors to company policies
D) Hiring honest people

Question

Quizplus · Accepted Answer

A: A is incorrect because installing good internal controls is the most widely recognized way to eliminate opportunities to commit fraud. Good controls not only discourage the perpetration of fraud and limit the opportunities for fraud, but also limits the exposure if fraud does occur.
B: B is incorrect because monitoring employees does eliminate some of the opportunity to commit fraud. When employees are monitored, they likely feel less free to commit fraud and are less likely to see available ways to commit fraud. Also close monitoring facilitates early detection.
C: C is incorrect because a letter alerting vendors of company policy will eliminate some of the opportunities that purchasers may have to collude with vendors. This letter will help the vendors understand whether company buyers and sellers are acting in accordance with the rules.
D: D is correct. (Hiring honest people is not part of eliminating the opportunities for fraud, but is part of creating a culture of honesty, openness, and assistance).

Eliminating Opportunities for Fraud Includes All of the Following Except