Research Indicates That the Most Effective Way to Prevent and Deter

question 37

Multiple Choice

Research indicates that the most effective way to prevent and deter fraud is to

• A) implement programs and controls that are based on core values embraced by the company.
• B) hire highly ethical employees.
• C) communicate expectations to all employees on an annual basis.
• D) terminate employees who are suspected of committing fraud.

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Definitions:

Shortage Costs

Costs incurred from not having enough inventory to meet demand, including lost sales and customer dissatisfaction.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the normal operating cycle, whichever is longer.

Accounts Receivable Period

The average amount of time that it takes for a company to receive payments owed by its customers.

Calendar Year

The period from January 1st to December 31st, used for financial and administrative purposes.