A charitable organization provides substantial grants for important medical research. Assuming marginal controls are in place, which of the following possible frauds or misuses of organization assets should be considered the area of greatest risk?
A charitable organization provides substantial grants for important medical research. Assuming marginal controls are in place, which of the following possible frauds or misuses of organization assets should be considered the area of greatest risk?
Grants made to organizations associated with senior executives represent the greatest risk because the primary function of the charitable organization is to provide grants for important medical research. Misuse in this area directly impacts the core mission of the organization and could lead to significant financial and reputational harm. Additionally, involvement of senior executives increases the risk of conflicts of interest and ethical violations, which are serious concerns.
Key words are "grants" and "medical research".
In fact, it not only affects the core business, but also senior executives.
This would be due to the qualifier 'greatest' risk. Office supplies would not be material as compared to the core business of the charity firm which is the issuance of grants.
Why not B?