CFE – Fraud Prevention and Deterrence — Question 24

Which of the following is a best practice to ensure a successful fraud reporting program?

Answer options

• A. Employees should be informed that, to the extent possible, their names will not be disclosed
• B. The company should communicate that fraud, waste, and abuse are more likely to occur in large organizations than small ones
• C. Employees are held accountable for reporting tips that are not able to be substantiated
• D. The company should require employees with information about potential fraud to report it directly and only to their immediate supervisor

Correct answer: D

Explanation

The correct answer is D because it establishes a direct reporting line that can help ensure that information about potential fraud is handled appropriately and promptly. Option A, while promoting confidentiality, does not provide a clear reporting structure. Option B focuses on general statements regarding fraud prevalence, which does not directly aid in the reporting process. Option C is counterproductive, as it may discourage employees from reporting potential fraud due to fear of repercussions.