Final answer:
The most effective measure to deter fraud by upper level managers is internal controls. An enforced code of ethics can also be effective.
Step-by-step explanation:
The most effective measure to deter fraud by upper level managers is internal controls. Internal controls are processes and procedures implemented by an organization to ensure the accuracy and reliability of financial and operational information, as well as to prevent and detect fraud. They include measures such as segregation of duties, regular audits, and establishing a strong control environment.
An enforced code of ethics can also be effective in deterring fraud, as it sets clear expectations for ethical behavior and consequences for violations. However, it is not enough on its own and should be complemented by other control measures.
Matching documents prior to payment and segregating custody of inventory from inventory record keeping are important control measures, but they may not be as effective in deterring fraud by upper level managers compared to internal controls and an enforced code of ethics.