What organizational action is essential to reduce vulnerability to fraud?

Implementing effective anti-fraud controls is essential in reducing vulnerability to fraud because these controls are designed to detect and prevent fraudulent activities within an organization. Anti-fraud controls include a combination of policies, procedures, and systems that create a framework to monitor and manage risks associated with fraudulent behavior. This may involve conducting regular risk assessments, establishing clear codes of conduct, conducting employee training on fraud awareness, and implementing mechanisms for reporting suspicious activities. By creating a comprehensive approach to fraud prevention, organizations can deter potential fraudulent actions and ensure that there are robust systems in place to identify and respond to breaches when they occur.

Other options, while potentially beneficial to organizational health and morale, do not directly address the critical need to establish structured measures specifically aimed at preventing fraudulent activities. Restricting access to digital files may help in some cases but is only one aspect of a broader anti-fraud strategy. Applauding high-performing employees can foster a positive work environment, and increasing employee salaries may improve retention and morale, but neither contributes to a direct reduction in fraud risks.