Which of the following is a preventive control for fraud?
Which of the following is a preventive control for fraud?
A preventive control is a measure taken to prevent errors or irregularities from occurring in the first place. Verifying that new vendors appear on the vendor pre-approved list ensures that transactions are only conducted with vetted and approved vendors, thereby preventing unauthorized or potentially fraudulent transactions. This action helps to stop fraudulent activities before they happen, making it a clear example of a preventive control for fraud.
Why C ?
The question asks you for preventive control for fraud. If the control has a set control step/action to verify the new vendors appear on the vendor pre-approved list then it prevents performing any transactions to vendors which are not approved. Preventive control stops something from happening and detective is the one which can identify that something happended.