Question

Since fraud programs are so costly, despite being ethically superior, they almost always result in higher costs and thus lower net income than using only a strong system of fraud detection.

Answer 1

Fraud programs can be costly and may result in lower net income compared to a strong system of fraud detection due to the expenses associated with implementing fraud prevention measures.

Step-by-step explanation:

When considering fraud programs, it is important to weigh the costs and benefits.

While fraud programs may be ethically superior, they can often result in higher costs and lower net income compared to using a strong system of fraud detection.

This is because implementing fraud programs can require significant financial investments in resources and technology, leading to higher expenses for the company.

For example, a company may need to hire additional staff, purchase specialized software, or invest in training programs to effectively implement fraud prevention measures.

These costs can significantly impact the overall financial performance of the company, resulting in lower net income.

On the other hand, a strong system of fraud detection focuses on identifying and preventing fraudulent activities using advanced algorithms and continuous monitoring.

While it may not be able to completely eliminate fraud, it can help minimize losses and financial damages.