Which of the following key activities related to fraud, is the most important and cost-effective way to reduce losses from fraud?
a. Follow-up legal action
b. Early fraud detection
c. Fraud investigation
d. Fraud prevention
d
FEEDBACK: a. Incorrect. Legal costs are expensive for the organization.
b. Incorrect. While early fraud detection helps limit the cost of the fraud, fraud prevention is the most cost effective tool to deter fraud.
c. Incorrect. Fraud investigations can be extremely expensive to the organization.
d. Correct. Fraud prevention programs are the most cost-efficient way to deter fraud.
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