Rationale for Correct Answer: Conducting vendor background checks before adding them to the master file is a strong preventive control against shell companies, conflicts of interest, and vendor collusion. It helps ensure vendor legitimacy before business begins.
Analysis of Incorrect Options:
B – Too broad; monitoring should focus on practical red flags, not “all schemes.”
C – Violates segregation of duties, increasing fraud risk.
D – Monitoring should be ongoing, not limited to once a year.
Key Concept: Procurement fraud prevention through vendor due diligence and segregation of duties.
Chosen Answer:
This is a voting comment (?). You can switch to a simple comment. It is better to Upvote an existing comment if you don't have anything to add.
Submit