BUSINESS ADMINISTRATION
MANAGEMENT INFORMATION SYSTEM
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Check and balances
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Regulatory compliance
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Internal fraud
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Fraud risk management
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Detailed explanation-1: -To ensure that all parties are aware of their responsibilities for identifying exposures to fraudulent activities and for establishing controls and procedures for preventing such fraudulent activity and/or detecting such fraudulent activity when it occurs.
Detailed explanation-2: -Who is responsible for fraud prevention? According to American Institute of Certified Public Accountants (AICPA) auditing standards, 2 the primary responsibility for prevention and detection of fraud rests with those charged with governance and management.
Detailed explanation-3: -Asset misappropriation fraud happens when people who are entrusted to manage the assets of an organisation steal from it. Asset misappropriation fraud involves third parties or employees in an organisation who abuse their position to steal from it through fraudulent activity. It can also be known as insider fraud.
Detailed explanation-4: -The entity’s management is responsible for the prevention and detection of fraud and errors, by monitoring the internal control system and the financial accounting system. Internal audit reduces the risk of fraud and error, but cannot eliminate it.