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ACCA Applied Skills · Corporate and Business Law (Global) · Fraudulent and criminal behaviour

Which of the following is an internal measure a company can adopt to help prevent fraud by its staff?

Segregating duties is a recognised fraud prevention measure. When no single person controls a transaction from authorisation to recording, fraud requires collusion and is more likely to be detected. Combining those roles or removing reporting channels would weaken controls and increase fraud risk.

  1. AAllowing one employee to authorise and record the same payments to speed up processing
  2. BSegregating duties so that no single person controls a transaction from start to finishCorrect
  3. CRemoving all reporting channels to avoid unfounded allegations

Explanation

Segregation of duties reduces opportunity for fraud because collusion would be needed. The first option removes that control and increases risk. Removing reporting channels weakens detection and is contrary to good practice.

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