CLG 006 Certifying Officer Practice Exam

Which factor does NOT contribute to pecuniary liability?

1. Payment errors

2. Fraudulent activities

3. Clearances from auditors

4. Negligent oversight

The correct answer is: Clearances from auditors

The factor that does not contribute to pecuniary liability is the clearances from auditors. When auditors perform their duties, they review and assess the financial practices and compliance of an organization. If an organization receives clearances from auditors, it typically indicates that their financial statements and practices are in order and comply with accounting standards and regulations. This suggests a level of oversight and adherence to proper procedures, which can help mitigate the risk of pecuniary liability. In contrast, payment errors, fraudulent activities, and negligent oversight all represent failures or inadequacies in financial management that can lead to pecuniary liability. Payment errors involve mistakes in financial transactions, which can result in financial loss. Fraudulent activities directly harm the integrity of financial practices and can also lead to legal repercussions. Negligent oversight reflects a failure to adequately supervise financial practices, thereby increasing the risk of errors or misconduct, which can also result in financial liability for the organization.