Which of the following is a valid trigger for implementing Additional Operating Requirements?

• A. Two late sales reports
• B. Two dishonored drafts/checks
• C. Two defaults
• D. All of the above

Answer: (D)

Additional Operating Requirements are put in place when repeated issues in the reporting and settlement process indicate increasing risk. Each of these situations shows a pattern that prompts closer monitoring and extra controls.

Two late sales reports signal ongoing delays in capturing and communicating sales data, which makes timely reconciliation harder and increases the chance of errors or gaps in the records.

Two dishonored drafts or checks reveal reliability problems with payments, raising concerns about cash flow and settlement integrity.

Two defaults demonstrate a continued failure to meet obligations, signaling higher credit risk and potential disruption to routine operations.

Since any one of these scenarios is a valid trigger on its own, the option that includes all of them is correct. All of the above is the best answer because it acknowledges that each condition qualifies as a trigger for implementing Additional Operating Requirements.