Final answer:
The use of change analysis and trend analysis of buyer or vendor activity is a possible means of detecting a buyer obtaining kickbacks, which helps to identify irregularities and ensure ethical business practices. So the correct answer is option 4.
Step-by-step explanation:
The use of change analysis and trend analysis of buyer or vendor activity could be a way to uncover instances where a buyer received kickbacks from suppliers. When a new buyer is hired, for example, a sudden spike in purchases from new vendors may be a symptom of unethical activity.
These tools are meant to track and examine such patterns over time. Businesses may be able to spot anomalies and take necessary action by looking at purchase orders, invoices, and vendor interactions. This can help lower the risk of using inaccurate information and guarantee moral business conduct.
Internal Audit and Controls: Abnormalities in purchase habits can be found through frequent audits and robust internal controls.
Data Analysis and Monitoring: Examine purchase records for any unexpected increases in orders placed with particular vendors by using data analytics.
Vendor Due Diligence: Verify new vendors' validity and ethical behavior by thoroughly investigating their backgrounds.
Establish a private reporting system known as a "whistleblower hotline" so that staff members can voice concerns without worrying about facing consequences.
Examine Vendor Relationships: Make that the selection process is legitimate, competitive, and fair by routinely assessing vendors.
Surprise Audits: To ensure accuracy and validity, conduct unannounced audits or inspections of vendor transactions.
Training and Awareness: Inform staff members about moral conduct and the repercussions of committing fraud.