Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Who is ultimately responsible for preventing and detecting fraud within a company?

1. The finance team

2. The directors

3. External auditors

4. Internal compliance officers

The correct answer is: The directors

The ultimate responsibility for preventing and detecting fraud within a company rests with the directors. This responsibility is derived from their role in governance, where they are tasked with overseeing the operations and ensuring that adequate systems and controls are in place. Directors are expected to set the tone at the top, promoting an ethical culture and establishing a framework for risk management, which includes the risks associated with fraud. While the finance team, external auditors, and internal compliance officers play vital roles in overseeing financial practices, conducting audits, and implementing compliance measures, these functions support the directors in their governance role. The directors' involvement is crucial in creating a robust anti-fraud environment within the organization, as they are ultimately accountable for the company's integrity and reputation. Their decisions on policies, procedures, and resource allocation directly influence the effectiveness of fraud prevention and detection measures. This accountability highlights why directors must actively engage in risk management strategies and foster a culture of compliance throughout the company.