Including a clause requiring vendors to report misconduct demonstrates a commitment to transparency and ethical standards.
This measure also ensures accountability and provides the organization with critical information about potential issues.
Analysis of Other Options:
A. Internal audits:While valuable, conducting internal audits of vendors before an agreement is impractical and costly.
B. Concealing due diligence efforts:Transparency in due diligence helps build trust with vendors.
C. Post-contract questionnaires:Due diligence must occur before contracts are signed.
Conclusion:Including a contractual clause about misconduct reporting is the most accurate recommendation.
[References:ACFE guidelines on vendor due diligence and fraud prevention​​., , , ]
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