According to the Standards, which of the following control strategies would be the most effective in helping to prevent fraud?
According to the Standards, which of the following control strategies would be the most effective in helping to prevent fraud?
Implementing a whistleblower hotline where individuals can make anonymous phone calls to report fraudulent activities is the most effective control strategy for preventing fraud. This mechanism provides a direct, confidential way for employees to report suspicious activities without fear of retaliation, thereby potentially catching fraudulent behavior early and deterring future violations. Other strategies like signing a code of conduct, providing fraud awareness training, and conducting routine surveys are beneficial but may not be as immediately effective in detecting and preventing fraud compared to a whistleblower hotline.
Option B is the most effective because it involves employees in good practices and attitudes that contribute to the prevention of external and internal fraud (they may not be intentionally involved themselves).
I thought whistleblower hotline is more of a detective control, people can report after fraud has occurred.