Management has implemented a segregation-of-duties policy for handling inventory. Which of the following fraud risks would be more concerning to an internal auditor following the implementation of this new policy?
While a segregation-of-duties policy primarily mitigates the risk of a single individual perpetrating fraud, it introduces the increased risk of collusion between parties. Collusion can circumvent the controls established by the segregation of duties, making it a significant concern for internal auditors to monitor in environments where duties are segregated.
Institute of Internal Auditors (IIA) - Practice Advisories on Assessing Fraud Risks
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