Final answer:
Option (c), When a bank employee notices activity in a dormant account, they should report it to the internal auditor.
Step-by-step explanation:
If a bank employee notices activities in a dormant account, as a safeguard against fraud, the appropriate action would be to notify the internal auditor. Typically, activities in a dormant account can signal unauthorized or fraudulent use, and the internal auditor's role is to investigate such anomalies. They are responsible for carrying out independent assessments of the bank's internal controls and procedures, including those related to fraud prevention.
The internal auditor would assess the situation to determine whether the activity is legitimate or if there is cause for concern. If necessary, the auditor can then initiate further investigation and involve other departments or authorities as needed. It's important to handle these issues with confidentiality and due diligence to protect both the customer's and the bank’s interests.