Which of the following would best describe a control implemented to detect cash register disbursement fraud in a large retail store?

Question

Options

• ASeparate the duties of processing and authorizing refunds on merchandise
• BPost signs in the register area prompting customers to ask for and examine their sales receipts
• CPeriodically count the cash in the register and compare it to the expected amount
• DUse cash registers with internal tapes that are tamper proof and that require a manager to process

• A
  4% (2)
• B
  11% (6)
• C
  77% (41)
• D
  8% (4)

Explanation

Counting cash and comparing it to the expected register total is a detective control - it identifies discrepancies after they occur, which is exactly what "detect" means in internal control terminology. When a cashier processes a fraudulent disbursement (e.g., a false refund that pockets cash), the register balance will come up short, and the periodic count will surface that gap.

Why the distractors are wrong:

• A (separating refund duties) is a preventive control - it stops fraud before it happens by requiring dual involvement, not revealing it afterward.
• B (customer receipt signs) is more of a deterrent and relies on customers to catch errors, making it indirect and unreliable as a formal control.
• D (tamper-proof tapes with manager override) is also preventive - it blocks unauthorized transactions at the point of entry rather than uncovering ones that already occurred.

Memory tip: Map the control type to the timeline - Prevent = before, Detect = after. Any time a question asks about detection, look for the answer that involves comparing, reconciling, or counting after the fact. "Count and compare" is the classic detective control pattern on audit exams.

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