What is a typical corrective action following the discovery of fraud?

Implementing stricter protocols to prevent recurrence is a critical corrective action following the discovery of fraud because it addresses the root cause of the fraudulent activity. After identifying fraud within an organization, it is essential to evaluate the systems and processes that allowed such behavior to occur. By instituting stricter protocols, an organization can reduce vulnerabilities, enhance oversight, and ensure compliance with ethical standards and regulations.

This may involve developing robust internal controls, conducting training for employees on ethics and reporting procedures, or installing surveillance or auditing systems. These measures not only help deter future fraud but also restore trust and accountability within the organization and among its clients.

In contrast, other options like restructuring pricing without informing clients or increasing advertising serve more as superficial responses that do not address the fundamental issues of fraud prevention. Offering refunds without acknowledgment fails to rectify the underlying problems while potentially undermining customer trust further. These alternatives do not support sustainable practices or contribute to a culture of integrity.