Final answer:
One of the most fundamental and effective controls in an organization is the Segregation of incompatible duties (SoD), which helps to prevent fraud and errors by distributing responsibilities among different people.
Step-by-step explanation:
Among the options provided, C) Segregation of incompatible duties across several people is one of the most fundamental and effective controls. This practice, known as segregation of duties (SoD), involves dividing tasks and privileges among various individuals in an organization to reduce the risk of fraud and errors. When duties are segregated, it ensures that no single individual has control over all aspects of any critical operation, thereby increasing accountability and reducing the opportunities for mismanagement or unethical behavior.
Effective corporate governance relies on several key institutions, such as the board of directors, auditing firms, and outside investors to provide oversight. However, internal controls within the organization, like SoD, are crucial for day-to-day operations to prevent misconduct or criminal behavior from going unchecked. Cases like the failure of Lehman Brothers highlight the importance of robust internal controls alongside external governance to maintain corporate integrity and investor confidence.