Problem: Internal Control Policies/Procedures to Prevent Fraud Three specific internal control policies/procedures that could have helped prevent the fraud include: 1. Segregation of Duties: Separating the responsibilities of initiating, approving, and recording stock options awards to ensure no single individual can manipulate the process. 2. Regular Independent Audits: Conducting periodic audits of stock options grants and related financial disclosures by independent auditors to detect irregularities. 3. Transparent Reporting: Implementing a policy mandating timely and accurate disclosure of all stock options grants and related compensation expenses in financial statements to prevent misstatements.