Which of the following statements is true regarding electronic funds transfer (EFT)?

Which of the following statements is true regarding electronic funds transfer (EFT)?
A . EFT is a popular mechanism for improving efficiency, but results in less internal control.
B . EFT significantly reduces the risk of fraud by eliminating the need for authorizations.
C . EFT eliminates payment delays due mostly to the introduction of automated cash controls,
D . EFT makes use of numerous automated controls, but is still vulnerable to fraudulent accounting entries.

View Answer

Answer: D

Explanation:

Electronic funds transfer (EFT) makes use of numerous automated controls, which improve efficiency and reduce the risk of some types of fraud. However, it is still vulnerable to fraudulent accounting entries, such as those arising from overriding existing controls or exploiting security weaknesses. Therefore, while EFT systems incorporate significant controls, they do not completely eliminate the risk of fraud.

Reference: Best practices and guidelines on electronic funds transfer from financial management and information systems security sources.