Which components are associated with fraud prevention?

Which components are associated with fraud prevention?

• A. Control environment; risk recognition and assessment; monitoring and reporting
• B. Access controls; encryption; backups
• C. Budgeting; forecasting; variance analysis
• D. Quality assurance; test plans; defect tracking

Answer: (B)

Fraud prevention hinges on reducing opportunities for fraudulent activity by putting in place controls that restrict access, protect data integrity, and ensure recoverability. Access controls limit who can interact with sensitive systems or data, require authentication, and support segregation of duties so no single person can carry out all fraud-related steps. Encryption protects the confidentiality and integrity of data, making unauthorized modification or disclosure much harder and ensuring that any data captured is unreadable if access is gained. Backups ensure there is a reliable, restorable copy of data, supporting continuity and enabling detection and restoration after fraudulent changes or losses. Taken together, these components directly address the avenues through which fraud could occur. Other options focus on governance and risk management, budgeting, or quality assurance, which do not provide the concrete preventive controls listed above.

Fraud prevention hinges on reducing opportunities for fraudulent activity by putting in place controls that restrict access, protect data integrity, and ensure recoverability. Access controls limit who can interact with sensitive systems or data, require authentication, and support segregation of duties so no single person can carry out all fraud-related steps. Encryption protects the confidentiality and integrity of data, making unauthorized modification or disclosure much harder and ensuring that any data captured is unreadable if access is gained. Backups ensure there is a reliable, restorable copy of data, supporting continuity and enabling detection and restoration after fraudulent changes or losses. Taken together, these components directly address the avenues through which fraud could occur. Other options focus on governance and risk management, budgeting, or quality assurance, which do not provide the concrete preventive controls listed above.