Why Would Some Loss Prevention Measures Not Be Worth Implementation

question 32

Multiple Choice

Why would some loss prevention measures not be worth implementation?

• A) Some corporations have poor internal control policies and implementation of some loss prevention measures would notify employees of these poor controls.
• B) The IRS does not allow deductions for loss prevention measures.
• C) Only court ordered loss prevention measures can me implemented.
• D) Some measures, such as excessively tight security to prevent shoplifting, would cost more in sales and manpower costs than would save in shoplifters being caught.

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Definitions:

Segregation of Duties

A principle in accounting and corporate governance that aims to reduce the risk of error and fraud by dividing responsibilities among different individuals or departments.

Accounts Receivable

Financial obligations of clients or customers towards a business for received goods or services that are awaiting payment.

Subsidiary Ledger

A subsidiary ledger is a group of similar accounts whose totals summarize into a single amount shown in the general ledger, aiding detailed financial analysis and tracking.

Fraud Triangle

The fraud triangle is a model that explains the factors that lead individuals to commit fraud: pressure, opportunity, and rationalization.