Final answer:
A high-fraud environment is typically caused by a lack of segregation of duties, which allows an individual to control multiple aspects of operations that could facilitate and hide fraud.
Step-by-step explanation:
Among the options provided, C) Lack of segregation of duties generally results in a high-fraud environment. This is because when duties are not properly segregated, a single individual may have control over multiple aspects of financial transactions or sensitive processes, which can enable and conceal fraudulent activities.
Furthermore, the difficulty of whistleblowing within bureaucracies, where reporting corruption can lead to serious personal consequences, emphasizes the importance of strong controls and ethical culture. Employees may be dissuaded from reporting questionable activities if they fear retaliation or job loss, thereby enabling a high-fraud environment to persist.