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Pecuniary liability acts as an incentive to guard against which of the following?

  1. Fault or negligence

  2. Fault and theft

  3. Corruption

  4. Error and dishonesty

The correct answer is: Error and dishonesty

Pecuniary liability serves as an important mechanism to incentivize individuals to be vigilant against both error and dishonesty. When individuals know that they are financially accountable for their actions, it encourages them to exercise greater care and precision in their duties. This accountability helps to minimize unintentional mistakes that might lead to financial losses, as well as deliberate dishonest actions aimed at misuse of resources. Understanding the nature of pecuniary liability reveals that it primarily focuses on the financial implications of one's actions. Thus, the potential for personal financial loss acts as a deterrent against negligence in judgment and any unethical behavior. This system of accountability ensures that individuals remain committed to ethical standards and perform their duties with integrity, thereby protecting both their own interests as well as those of their organization. Keeping this context in mind clarifies why pecuniary liability is particularly effective in promoting conscientious behavior regarding errors and dishonesty.