Colorado Life Producer License Practice Test

What is a primary goal of an anti-fraud plan?

1. To reduce advertising costs

2. To prevent, detect, and investigate fraud

3. To increase employee morale

4. To improve customer satisfaction

The correct answer is: To prevent, detect, and investigate fraud

A primary goal of an anti-fraud plan is to prevent, detect, and investigate fraud. This objective is essential because fraud poses a significant risk to the financial integrity of businesses and can undermine stakeholder trust. An effective anti-fraud plan establishes processes and protocols aimed at identifying potential fraudulent activities before they cause damage, as well as providing mechanisms for investigation if fraud does occur. This proactive approach helps organizations to maintain compliance with legal and regulatory standards, protect company assets, and uphold the reputation of the organization. While options like reducing advertising costs, increasing employee morale, and improving customer satisfaction are important business objectives, they are not directly related to the intent of an anti-fraud plan. The essence of such plans is fundamentally rooted in risk management and fraud mitigation, underscoring the critical nature of option B in this context.