Which statement about control activities is consistent with anti-fraud program best practices?

• A. Dividing responsibilities to prevent one person from both perpetrating and concealing fraud.
• B. Centralizing duties.
• C. Outsourcing all control functions.
• D. Having one person handle everything.

Answer: (C)

Segregation of duties in control activities is a fundamental anti-fraud measure. By dividing responsibilities so that no single person can both initiate and complete a transaction and conceal it, an organization creates independent checks. Different people handle authorization, asset custody, recording, and reconciliation, so each step verifies the others. This makes it much harder for someone to commit fraud and then cover it up, because completing the wrong or unauthorized action would have to slip past multiple separate controls.

Centralizing duties or having one person manage every step removes those built‑in checks and creates a single point of failure. If that individual is dishonest or makes a mistake, there’s little to prevent or detect the problem. Outsourcing all control functions also weakens oversight and accountability; while third parties can perform some tasks, complete outsourcing eliminates the internal separation that helps governance and timely detection of irregularities. Controls still require clear ownership, monitoring, and verification, which are best maintained through a balanced mix of in-house responsibilities and appropriate external support—not by handing everything to one entity.

So, the practice that aligns with anti-fraud best practices is dividing responsibilities so different people perform different parts of a process and ongoing independent monitoring remains in place.