Management Notes

Reference Notes for Management

Misappropriation of goods may be checked by

Misappropriation of goods may be checked by


A. Proper supervision over stock
B. Checking of employees
C. Punishment of employees
D. None of the above

The Correct Answer Is:

  • B. Checking of employees

The correct answer is B) Checking of employees.

Why Checking of Employees is Effective in Preventing Misappropriation of Goods:

Preventing the misappropriation of goods is a critical concern for businesses and organizations, as it helps maintain integrity, protect assets, and ensure the efficient operation of the organization. Checking employees is a crucial strategy in achieving this goal. Here’s a detailed explanation of why checking employees is effective in preventing misappropriation of goods, along with explanations for the other options:

B. Checking of Employees (Effective):

Checking of employees involves various measures aimed at monitoring their activities, conduct, and adherence to company policies and procedures. This can include:

Inventory Audits:

Regular audits of inventory and stock levels can help identify discrepancies between recorded stock and actual stock on hand. Employees responsible for handling inventory may be subject to random or scheduled audits to ensure that goods are not being misappropriated.

Access Control:

Limiting access to storage areas, warehouses, or sensitive inventory locations to authorized personnel only can help prevent unauthorized employees from tampering with or misappropriating goods.


The use of surveillance cameras or other monitoring systems can deter employees from engaging in theft or misappropriation. Knowing that their actions are being observed can act as a deterrent.

Documented Processes:

Establishing clear and documented processes for receiving, storing, and distributing goods can reduce the likelihood of misappropriation. Employees should be trained in and required to follow these procedures.

Whistleblower Programs:

Encouraging employees to report suspicious activities or concerns related to misappropriation anonymously can help uncover potential issues before they escalate.

By implementing these measures and regularly checking employees’ adherence to them, organizations can effectively deter and detect instances of misappropriation. It creates a system of accountability and transparency that discourages employees from engaging in fraudulent activities.

Why the Other Options are Not as Effective:

A. Proper Supervision Over Stock (Effective but Limited):

While proper supervision over stock is essential, it primarily focuses on monitoring inventory levels and ensuring that stock is well-maintained and accounted for. However, it may not be sufficient on its own to prevent misappropriation, as employees may find ways to manipulate records or steal goods without detection, even with supervision.

C. Punishment of Employees (Not Preventative):

Punishment of employees is a reactive measure rather than a preventive one. While it is important to have consequences for employees who engage in misappropriation, relying solely on punishment does not proactively prevent the behavior from occurring in the first place. Preventive measures are more effective in reducing the likelihood of misappropriation.

D. None of the Above (Ineffective):

Selecting “none of the above” would mean not implementing any preventive measures against misappropriation, which is not a recommended approach. Preventing misappropriation is crucial for protecting a company’s assets and reputation. Without proactive measures like checking employees, an organization is more vulnerable to internal fraud and theft.

In conclusion, checking employees is an effective strategy for preventing the misappropriation of goods. It involves a range of measures, including audits, access control, surveillance, documented processes, and whistleblower programs, to deter and detect fraudulent activities.

While other options like proper supervision over stock and punishment of employees have their roles, they are not as comprehensive or preventive as checking employees. A proactive approach that includes regular monitoring and checks on employees is essential for maintaining the integrity of an organization’s assets and operations.

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