How can regular ethics training reduce fraud risk?

• A. Reduces training costs by eliminating sessions.
• B. Regular ethics training has no impact on fraud risk.
• C. Improves awareness, reduces rationalization, and encourages reporting.
• D. Increases the length of the onboarding process only.

Answer: (C)

The main idea this item tests is how ongoing ethics training changes behavior to lower fraud risk. Regular ethics training keeps integrity at the forefront by building awareness of what constitutes improper conduct, the policies in place, and the proper channels for handling concerns. By strengthening awareness, it helps employees spot red flags and understand why certain actions are unacceptable. It also reduces rationalization—the tendency to justify questionable behavior—by reinforcing strong norms and clearly communicating consequences. Importantly, it encourages reporting by making employees comfortable with speaking up and by clarifying how to report issues safely and confidentially. All of these effects work together to deter fraud, because problems are more likely to be recognized, confronted, and addressed early. The other options miss the point: eliminating training sessions undermines ongoing reinforcement; saying there’s no impact contradicts what we observe about culture and controls; and focusing only on onboarding length ignores the need for continuous ethics development.