If an ARC accredited agency is not in compliance with all ARC security rules, what is the result regarding theft liability?

• A. They are not protected from liability
• B. They are automatically insured
• C. They incur no liability
• D. They are exempt from audits

Answer: (A)

ARC security rules establish the controls for safeguarding ARC tickets and funds. When an agency is accredited, ARC’s theft liability protection applies only if the agency is fully in compliance with all the security requirements. If the agency fails to meet every rule, that protection does not apply, so losses from theft are the agency’s responsibility. This reflects that the safeguards are what enable the liability protection; without full compliance, the protection is not in effect. The other options don’t fit because there isn’t automatic insurance, there is liability, and noncompliance does not grant exemption from audits—rather, it jeopardizes protection and can lead to enforcement actions.