Employee fraud or theft can MOST likely be uncovered through which of the following?

Understanding Audits and Assessments:

Risk Assessment: Identifies potential risks but does not specifically uncover fraud or theft.

Sarbanes-Oxley Audit: Enforces rigorous internal controls and audits, specifically designed to uncover financial discrepancies, including fraud.

Performance Audit: Evaluates efficiency and effectiveness but may not focus on fraud detection.

Centralized Procurement Structure: Improves control but does not specifically address fraud detection.

Sarbanes-Oxley (SOX) Compliance:

SOX mandates strict internal controls and procedures for financial reporting.

Includes provisions for uncovering and preventing fraudulent activities within an organization.

Best Approach:

A SOX audit is most likely to uncover employee fraud or theft due to its stringent requirements for internal controls and financial transparency.

Outcome:

Ensures thorough examination of financial practices and helps identify any discrepancies or fraudulent activities.

References:

Sarbanes-Oxley Act of 2002 documentation

Internal auditing standards from the Institute of Internal Auditors (IIA)