Question

Which of the following is not a way to improve fraud detection?

Select one:

a. Install fraud detection software.

b. Implement a fraud hotline.

c. Employ a computer security officer.

d. Implement computer-based controls over input, processing, storage, and output activities.

Answer 1

The Correct answer would be option D -  Implement computer-based controls over input, processing, storage, and output activities.

These controls can be modified by any person having requisite knowledge and skills. Since manual intervention is possible it would not be considered a way to improve fraud detection.

Now we need to understand why the other options are considered as a way to improve fraud detection

a. Install Fraud detection software - By installing a fraud detection software if any suspicious activity occurs within an organisation then such software will detect the suspicious activity which might lead to fraud and prevent it from materialising into real threat. This type of softwares monitor transactions and activities rigorously so that any fraud arising from them can be detected timely.

b. Implement a fraud hotline - By establishing a fraud hotline any person who is aware of fraud can provide a lead on the matter so that the fraud can be detected. This is the most significant fraud detection method. For example if the employees of a company are aware of any suspicious activity in the organisation then they may provide such information through the fraud hotline.

c. Employ a computer security officer - This is one of the method to improve fraud detection. A computer security officer shall be entrusted with the job of monitoring suspicious activites and detecting them. Any security breaches shall be adequately handled and shall be reported to proper authority. It shall be his responsibility to maintain a proper fraud detection system working.