Which control activity is designed to make fraud less likely

Collusion is an intentional act of two or more employees to accomplish theft of company assets. Which control activity is designed to make fraud less likely because it would require collusion among employees?

A. Adequate documents and records
B. Clearly defined authority and responsibility
C. Safeguards over assets and records
D. Segregation of duties

Solutions

Expert Solution

Correct answer is option D = Segregation of duties

Segregation of duties is a basic control activity that is designed to prevent the fraud and collusion between employees.

BY segregation of duties, various steps in a business process were assigned to different people so that no one person or group of employees should be in a position to commit and conceal errors or fraud in their day-to-day jobs.

option a, b,c are objectives of internal controls but not control activities.

Segregation of duties is a basic control activity that is designed to prevent the fraud and collusion between employees.

Ramesh R answered 3 years ago

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