Which management control can help mitigate fraud risk?

Understanding the role of well-trained managers is essential in mitigating fraud risk within an organization. Skilled managers play a vital role in ensuring that proper internal controls are established and followed. Their training equips them with knowledge of the best practices in monitoring operations, evaluating risks, and maintaining ethical standards among staff.

Well-trained managers can implement robust controls and create an environment of accountability. They are typically aware of the warning signs of potential fraudulent activities and are equipped to investigate and address any irregularities. Additionally, by promoting a culture of integrity and ethical behavior, trained managers can foster an atmosphere where employees understand the seriousness of fraud and are less likely to engage in dishonest practices.

In contrast, unclear expenditure policies can lead to confusion and potential exploitation by employees, while informal management structures lack the necessary oversight to deter fraudulent actions. Furthermore, unmonitored staff performance allows for a lack of accountability and can create opportunities for fraud to occur without detection. Thus, the emphasis on well-trained managers is crucial in establishing a strong framework for mitigating fraud risk effectively.