Final answer:
The internal auditor's responsibility in fraud deterrence is to evaluate the adequacy of the organization's internal controls designed to prevent fraud. Their role is preventative, focusing on identifying potential vulnerabilities within the system before any fraudulent actions can take place.
Step-by-step explanation:
One of the responsibilities of the internal auditor in the deterrence of fraud within an organization is Evaluating the adequacy of controls to prevent fraud. This involves assessing the internal control systems to ensure they are effective and robust enough to detect and deter fraudulent activities. The auditor's role is proactive, aiming to identify weak spots in the organization's defense against fraud before any misconduct occurs.
While actions like reporting suspected fraud to law enforcement or prosecuting perpetrators are vital in the fight against fraud, these are typically outside the realm of an internal auditor's direct responsibilities. Instead, their primary focus is on prevention and detection through internal controls and systems. The evaluation by the internal auditor is a critical component in maintaining the organization's integrity and financial health, making it a frontline defense against corporate crime.