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NEW QUESTION # 83
Which of the following statements is FALSE regarding an organization's fraud risk management program?
Answer: A
NEW QUESTION # 84
Which of the following is a TRUE statement regarding the role of a well-designed organizational structure within an anti-fraud program?
Answer: A
NEW QUESTION # 85
Which of the following is BEST classified as a type of external fraud risk?
Answer: C
Explanation:
Collusion between contractors is an example of external fraud risk because it involves external parties conspiring to defraud the organization. The other options describe internal fraud risks, such as actions committed by employees within the organization.
NEW QUESTION # 86
Which of the following statements regarding recommended vendor due diligence procedures is MOST ACCURATE?
Answer: D
NEW QUESTION # 87
For its compliance program to be effective, an organization must promote the program through appropriate incentives for compliance.
Answer: B
Explanation:
* Overview of Compliance Programs:An effective compliance program requires clear communication, enforcement, and promotion of ethical standards within an organization. Promoting compliance involves setting up positive incentives, such as rewards for ethical behavior, to encourage adherence to policies and regulations.
* Role of Incentives:
* Incentives serve as motivators for employees to align with the compliance culture. Examples include bonuses for meeting compliance goals, recognition for ethical behavior, and career advancement opportunities tied to compliance performance.
* The U.S. Federal Sentencing Guidelines for Organizations emphasize that for a compliance program to be effective, it must include incentives to encourage proper behavior and discipline to deter violations.
* Supporting Reference Materials:
* The Association of Certified Fraud Examiners (ACFE) highlights the importance of integrating incentives into compliance programs. These incentives are seen as essential for fostering a culture of ethics and preventing fraud.
* Industry standards and frameworks, such as COSO's "Internal Control - Integrated Framework," also stress the integration of incentives to promote adherence to internal controls and compliance standards.
* Importance of Positive Reinforcement:
* Positive reinforcement through incentives leads to higher employee morale, enhanced commitment to ethical practices, and a reduced likelihood of non-compliance.
* A compliance program that merely penalizes non-compliance without rewarding adherence can fail to motivate employees to prioritize compliance.
* Application in Fraud Prevention:
* By actively incentivizing compliance, organizations can proactively mitigate risks of fraud and unethical practices. This aligns employees' personal goals with the organization's ethical standards.
NEW QUESTION # 88
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