Question

the owner of a hardware store requires approval on all purchase orders. which employee theft prevention practice is this an example of?

employee training
hiring practices
internal controls
security measures

Explanation:

Analyze the business scenario

The scenario describes a hardware store owner who requires approval on all purchase orders. This is a policy designed to prevent unauthorized transactions and employee theft by ensuring that no single employee can initiate and complete a purchase without oversight.

Evaluate the options

• Employee training: This involves educating staff on policies, procedures, and skills, which does not directly describe a transaction approval mandate.
• Hiring practices: This refers to background checks, interviewing, and vetting candidates before employment.
• Internal controls: These are systematic measures (such as reviews, checks and balances, and authorization requirements) implemented by an organization to conduct its business in an orderly manner, safeguard its assets, and prevent fraud or error. Requiring approval on purchase orders is a classic example of an authorization control.
• Security measures: These typically refer to physical or digital security tools (like cameras, locks, or cybersecurity software) rather than administrative authorization workflows.

Apply mastered concepts

Using the Internal Controls and Loss Prevention knowledge points, we recognize that requiring management approval on financial transactions like purchase orders is a standard administrative policy designed to safeguard assets and prevent internal fraud. Therefore, this practice is classified as an internal control.

Answer:

• Employee training
• Hiring practices
• Internal controls (Correct answer)
• Security measures