General Studies · Internal Controls and Fraud Prevention
BRG has an internal control system and wishes to enhance fraud prevention. The audit committee is discussing the potential for fictitious employee payroll fraud and the importance of segregation of duties. Which of the following combinations correctly identifies a control measure that would directly prevent fictitious employee payroll fraud, and a primary purpose of implementing segregation of duties?
- 1Control Measure: Regular comparison of payroll records with HR records for active employees; Purpose: To ensure all transactions are mathematically accurate
- 2Control Measure: Authorisation of all overtime payments by a senior manager; Purpose: To facilitate faster decision-making within departments
- 3Control Measure: Regular comparison of payroll records with HR records for active employees; Purpose: To reduce the opportunity for a single person to commit and conceal fraud✓
- 4Control Measure: Regular reconciliation of bank statements; Purpose: To ensure all transactions are mathematically accurate
Correct answer
Control Measure: Regular comparison of payroll records with HR records for active employees; Purpose: To reduce the opportunity for a single person to commit and conceal fraud
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