Part 1The control procedure of prohibiting employees from accepting gifts is designed to reduce the risk of ________. Part 1
A. theft of inventory B. kickbacks C. fraudulent cash disbursements D. stockouts E. None of the above

Question

Part 1The control procedure of prohibiting employees from accepting gifts is designed to reduce the risk of​ ________. Part 1
A. theft of inventory B. kickbacks C. fraudulent cash disbursements D. stockouts E. None of the above

BlackTom AI · Accepted Answer

First, restating the question helps focus on what the control is designed to prevent: a prohibition on employees accepting gifts aims to lower certain ethics-related risks in the organization.
Option A: theft of inventory. While gifts could potentially be a distraction that might indirectly influence decisions related to inventory, the primary intent of gift prohibitions is not to prevent theft of inventory itself but to address improper influence and bribery. Therefore this option is not the best match.
Option B: kickbacks. Kickbacks are improper payments or benefits given in return for favorable treatment, such as awarding contracts or approving transactions. A policy that prohibits accepting gifts directly targets the risk of kickbacks by removing or reducing the incentives and opportunities for such bribery, making this option a strong fit.
Option C: fraudulent cash disbursements. Although improper gifts could potentially relate to fraudulent disbursement schemes in some contexts, the prohibition of gifts is more directly aimed at preventing bribery and reciprocal favors (kickbacks) than at the broader category of fraudulent disbursement schemes, which can occur in other ways.
Option D: stockouts. Stockouts refer to inventory running out and are unrelated to gift policies or bribery risk; thus this choice is clearly irrelevant to the control described.
Option E: None of the above. Since option B directly corresponds to the intended risk reduction of the control, this option is incorrect.
In summary, the control procedure targets the risk of kickbacks by limiting the gifts that could influence decisions, while the other options do not align as directly with the described control objective.

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Part 1The control procedure of prohibiting employees from accepting gifts is designed to reduce the risk of ________. Part 1 A. theft of inventory B. kickbacks C. fraudulent cash disbursements D. stockouts E. None of the above

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