Get ACFE CFE-Fraud-Prevention-and-Deterrence Dumps Questions Study Exam Guide Aug 10, 2026
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ACFE CFE-Fraud-Prevention-and-Deterrence certification exam is designed for professionals who are interested in fraud prevention and detection. Certified Fraud Examiner - Fraud Prevention and Deterrence Exam certification is offered by the Association of Certified Fraud Examiners (ACFE), which is a leading provider of anti-fraud training and education. The CFE-Fraud-Prevention-and-Deterrence exam is a rigorous assessment of a candidate's knowledge and skills related to fraud prevention and detection.
ACFE CFE-Fraud-Prevention-and-Deterrence Exam is an essential certification program for individuals seeking to enhance their skills and knowledge in the area of fraud prevention and deterrence. Certified Fraud Examiner - Fraud Prevention and Deterrence Exam certification program is designed to provide individuals with practical skills and knowledge that they can apply in their organizations to effectively prevent and detect fraudulent activities. The rigorous certification process ensures that individuals who earn the certification have met the required eligibility requirements and have the necessary skills and knowledge to excel in their careers.
NEW QUESTION # 22
Employee support programs are a fraud prevention mechanism that addresses which leg of the Fraud Triangle
- A. Pressure
- B. Rationalization
- C. Lack of integrity
- D. Opportunity
Answer: B
NEW QUESTION # 23
(Sloan, the internal audit manager for Elm, Inc., is working to formally incorporate the company's fraud risk assessment into its audit process. Which of the following is NOT a way that Elm's audit team should use the fraud risk assessment process and results as part of their audits?)
- A. To determine areas where the auditors can reduce their awareness of indicators of fraud
- B. To deliver reports that incorporate the results of the auditors' validation and testing of the fraud risk controls
- C. To design audit procedures that will enable auditors to look for fraud in known areas of high risk
- D. To map existing controls to the moderate-to-high fraud risks identified
Answer: A
Explanation:
The Fraud Risk Assessment chapter explains that auditors should use the fraud risk assessment to improve audit planning and increase attention to fraud indicators, especially in moderate-to-high risk areas. The manual states that auditors should design procedures that enable them to look for fraud in known high-risk areas, map existing preventive and detective controls to identified fraud risks, and develop reports that incorporate the results of validation and testing of fraud risk controls. It also instructs auditors to maintain an attitude of professional skepticism and remain alert for signs of fraud. Therefore, any suggestion that the audit team should use the process to reduce its awareness of fraud indicators is contrary to the manual's guidance.
Option A is the one that is NOT an appropriate use of the fraud risk assessment.
NEW QUESTION # 24
Management at ABC Corp. is assessing the company's ethical tone and how it affects the organization's fraud risk. To MOST EFFECTIVELY reinforce an anti-fraud culture, management should:
- A. Create an environment in which employees are dissuaded from challenging management's decisions
- B. All of the above
- C. Use a checklist of initiatives to make sure all the elements of a strong tone at the lop are in place
- D. Visibly adhere to the same set of ethics policies that is required of all employees
Answer: D
Explanation:
* Tone at the Top:
* Management must set a strong example by adhering to the same ethical standards as employees.
* Visible adherence builds trust and reinforces an anti-fraud culture.
* Analysis of Other Options:
* A. Checklist of initiatives: Helpful but insufficient by itself.
* B. Dissuading challenges: This is counterproductive, as it discourages transparency and accountability.
* D. All of the above: Incorrect, as Option B is detrimental to an anti-fraud culture.
* Conclusion:Visibly adhering to ethics policies is the most effective action.
NEW QUESTION # 25
Reputational damage is an indirect cost of fraud that can be difficult for organizations to calculate.
- A. False
- B. True
Answer: B
Explanation:
Indirect Costs of Fraud:
* Reputational damage is a significant indirect cost of fraud. It can lead to loss of customer trust, reduced employee morale, and long-term financial impact.
Why A is Correct:
* Quantifying reputational damage is challenging due to its intangible nature. The effects often manifest over time and are influenced by various factors, making precise calculation difficult.
NEW QUESTION # 26
According to Silk and Vogel's research, which of the following is one of the ways that businesses rationalize illegal conduct?
- A. Government regulations are justified because the additional costs of regulations and bureaucratic procedures increase government profits.
- B. Corporate violations that involve large sums of money are often spread among so many organizations that each gains very little individually.
- C. Government regulation is unnecessary because the matters being regulated are unimportant.
- D. Violations are caused by innocent errors in judgment rather than economic necessity.
Answer: B
NEW QUESTION # 27
According to ACFE research, which of the following is TRUE?
- A. Men and women commit similar amounts of occupational fraud.
- B. Most employees who commit occupational fraud are first-time offenders.
- C. Complaints about family problems is the most reported behavioral red flag displayed by fraud perpetrators.
- D. Frauds committed by staff-level employees cause higher median losses than those committed by owners and executives.
Answer: B
Explanation:
The White-Collar Crime chapter summarizes ACFE research on occupational fraud perpetrators. In the section addressing perpetrators' criminal backgrounds, the manual states that the vast majority of occupational fraudsters have no prior history of criminal fraud convictions and notes that only a small percentage had previously been convicted of a fraud-related offense. It concludes from these findings that most occupational fraudsters are first-time offenders. The manual also explains elsewhere that owners and executives tend to cause much larger median losses than lower-level employees, which eliminates option D. Because the question asks which statement is true according to ACFE research, the best answer is that most employees who commit occupational fraud are first-time offenders. This is a recurring finding in ACFE studies cited by the manual.
NEW QUESTION # 28
According to Diane Vaughan. which of the following factors increases an organization's inherent inclination toward committing crime?
- A. Management separates employee performance goals from company performance goals
- B. Management encourages employee loyalty through social functions
- C. All of the above
- D. Rewards are given to employees who challenge the status quo
Answer: B
NEW QUESTION # 29
Jenny is a highly respected employee at XYZ Corp. Her husband's gambling addiction has caused them to have a significant amount of debt. Jenny begins stealing money from the company to cover her husband's gambling losses. This situation best illustrates which leg of the Fraud Triangle?
- A. Rationalization
- B. Perceived non-shareable financial need
- C. Perceived opportunity
- D. Perceived acquiescence
Answer: A
NEW QUESTION # 30
An effective system of internal controls:
- A. Focuses more on detective controls than preventive controls
- B. Does not completely eliminate the risk of fraud
- C. Decreases the perception that fraud will be detected
- D. Focuses more on preventive controls than detective controls
Answer: D
NEW QUESTION # 31
Which of the following scenarios would MOST LIKELY be considered a violation of the ACFE Code of Professional Ethics?
- A. Grace, a CFE, uncovered internal control deficiencies that were material but unrelated to the financial statement fraud she was investigating. In her final report to management, Grace included information about the deficiencies despite their being unrelated to the situation she was hired to investigate.
- B. All of the above are violations.
- C. Mae, a CFE, was hired by a client to conduct a fraud examination but found nothing unusual. A year later, she received a legal order from the local prosecutor's office to provide the client's file. Mae complied with the court order despite not having the client's authorization to provide the file.
- D. Eric, a CFE, accepted a fraud examination assignment and then instructed his employee to assess the company's accounts receivable for indications of fraud. He accepted the employee's work that showed no evidence of fraud without conducting his own assessment. However, the employee missed some key information, causing Eric to fail to uncover a costly fraud scheme.
Answer: B
Explanation:
Each scenario involves violations of the ACFE Code of Professional Ethics including unauthorized disclosure, failure to exercise due professional care, and inclusion of information outside of the scope of the engagement.
"CFEs must demonstrate a commitment to integrity and objectivity, avoid conflicts of interest, perform assignments with due diligence, and comply with lawful orders, balancing client confidentiality with legal obligations." Reference:ACFE Fraud Examiners Manual, 2020 International Edition -Standards of Professional Conduct, Section 4.1100 et seq..
NEW QUESTION # 32
Which of the following factors increases an organization's inherent inclination toward committing crime according to Diane Vaughan's research?
- A. Management rewards employees who challenge how the company functions.
- B. Management encourages employee loyalty through social functions.
- C. Management separates employee performance goals from company performance goals.
- D. Management seeks diversity in attitudes and perspectives when hiring employees.
Answer: C
NEW QUESTION # 33
According to the 2018 Report to the Nations.___________schemes are the most common form of occupational fraud, while_________schemes are the costliest form of occupational fraud
- A. Asset misappropriation; financial statement fraud
- B. Corruption; asset misappropriation
- C. Financial statement fraud, corruption
- D. Asset misappropriation; corruption
Answer: D
NEW QUESTION # 34
Which of the following options is BEST classified as a type of external fraud risk?
- A. Reporting revenue in the wrong period.
- B. Adding ghost employees to payroll.
- C. Embezzling customer payments.
- D. Collusion between contractors.
Answer: D
Explanation:
Fraud risk can arise from both internal and external sources. Internal fraud risks involve employees, management, or others inside the organization abusing their access or authority. Embezzling customer payments, adding ghost employees to payroll, and reporting revenue in the wrong period are primarily internal risks because they usually require insider access to company funds, payroll systems, or accounting records. Collusion between contractors, however, is external because the misconduct is carried out by outside parties that do business with or affect the organization. Contractor collusion can include bid rigging, price fixing, market allocation, or coordinated efforts to manipulate procurement outcomes. Although employees might sometimes participate, the risk described in the answer choice is best classified as an external fraud risk. Therefore, option D is correct.
NEW QUESTION # 35
Which of the following Is TRUE regarding the reporting of the fraud risk assessment results?
- A. The fraud risk assessment report should be delivered in a style most suited to the language of the business
- B. A fraud risk assessment report should reflect the assessment team's subjective perspective regarding the risks identified
- C. The fraud risk assessment report should contain a detailed, comprehensive list of every assessment finding
- D. All of the above
Answer: A
Explanation:
* Reporting Fraud Risk Assessment Results:
* Reports should align with the organization's operational language to ensure comprehension by management and stakeholders.
* Why A is Correct:
* Using business-appropriate language ensures effective communication of findings and recommendations.
* Why Other Options are Incorrect:
* B: Comprehensive details may overwhelm the audience; only key findings are usually reported.
* C: Reports should reflect objective analysis, not subjective perspectives.
NEW QUESTION # 36
Susannah Is conducting an external audit of a company In a jurisdiction that is subject to International Standards on Auditing (ISAs). While undertaking her audit procedures, she discovers evidence that senior management has been fraudulently manipulating the financial statements. Which of the following is Susannah's BEST response to these findings?
- A. Susannah should confront management with her audit findings and try to get a confession.
- B. Susannah should Immediately report her findings to the secunties regulators
- C. Susannah should report her findings to the audit committee of the board of directors.
- D. Susannah should not disclose her findings to any other parties due to client confidentiality.
Answer: C
NEW QUESTION # 37
Which of the following is FALSE regarding the fraud risk assessment team?
- A. The team size should be limited to a maximum of three individuals.
- B. The team members might include both internal and external sources
- C. The team should consist of individuals with diverse knowledge, skills, and perspectives.
- D. The team members should have experience in gathering and eliciting information
Answer: A
NEW QUESTION # 38
Which of the following is one of the components of the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Enterprise Risk Management-Integrating with Strategy and Performance?
- A. Compliance
- B. Event avoidance
- C. Risk tolerance
- D. Review and revision
Answer: D
Explanation:
* Components of COSO's Enterprise Risk Management Framework:
* D. Review and revision: Ensures continuous improvement and adaptation of risk management practices to align with changing circumstances.
* A. Event avoidance: Not explicitly listed as a component but is part of broader risk responses.
* B. Risk tolerance: An element within risk management but not a separate component.
* C. Compliance: A goal of ERM but not a framework component.
* Conclusion:Review and revision is a core component of COSO's ERM framework.
References:COSO Enterprise Risk Management Framework-Integrating with Strategy and Performance.
NEW QUESTION # 39
According to the differential reinforcement theory, behavior is strengthened when which of the following is applied?
- A. Loss of reward
- B. Punishment
- C. Positive reinforcement
- D. Negative stimuli
Answer: C
NEW QUESTION # 40
According to G20/OECD Principles of Corporate Governance (the Principles):
- A. A corporate governance framework should focus on the rights of shareholders but does not need to include the rights of other organizational stakeholders
- B. All of the above
- C. Companies should disclose all financial information to investors, regardless of the cost burden of the disclosure
- D. Governments should have in place a corporate governance framework that promotes transparent and fair markets
Answer: D
NEW QUESTION # 41
Which of the following is FALSE regarding the discussion about the financial statements susceptibility to fraud that auditors are required to have under International Standard on Auditing (ISA) 240?
- A. The audit team should focus solely on how the company's assets could be misappropriated
- B. A The audit team should discuss how management could conceal fraud
- C. The audit team should consider whether the organizational culture might enable the rationalization of fraud
- D. The audit team should consider factors that provide the opportunity for fraud.
Answer: C
NEW QUESTION # 42
Which of the following statements is TRUE regarding the internal audit function's reporting responsibilities concerning fraud?
- A. The internal audit function should discuss management's level of cooperation with the assessment of the organization's fraud risk management in its report to the board of directors.
- B. The internal audit function should wait until issues related to fraud occur before communicating with senior management or the board of directors about the topic.
- C. The internal audit function should not disclose the results of its fraud audits to senior management or the board of directors to maintain independence.
- D. The internal audit function should avoid communicating with the board of directors about fraud because that is solely the responsibility of the legal function.
Answer: A
Explanation:
The internal audit function has an important role in evaluating governance, risk management, controls, and fraud risk management activities. Its reporting should include significant risk and control issues, including fraud risks, governance issues, and matters requiring attention from senior management or the board.
Therefore, if management does not cooperate with the assessment of fraud risk management, that fact is relevant and should be communicated to the board. Internal audit should not wait until fraud occurs before communicating about fraud risk. It also should not hide fraud audit results from senior management or the board in the name of independence. Fraud communication is not solely a legal department responsibility.
Accordingly, option D best reflects the internal audit function's reporting responsibilities concerning fraud.
NEW QUESTION # 43
Which of the following is NOT one of the three general approaches used to control corporate crime?
- A. Voluntary changes in corporate attitudes and structure
- B. Consumer action to force change
- C. Withdrawal of financial institution funding
- D. Strong intervention of the government
Answer: C
Explanation:
* General Approaches to Control Corporate Crime:
* Common approaches include government intervention, consumer action, and voluntary corporate changes.
* Financial institution funding is not typically listed as a direct control mechanism for corporate crime.
* Analysis of Options:
* B. Government intervention: Effective through regulation and enforcement.
* C. Consumer action: Encourages ethical practices through market pressures.
* D. Voluntary corporate changes: Demonstrates internal commitment to compliance.
* Conclusion:Withdrawal of financial institution funding is not one of the recognized general approaches.
NEW QUESTION # 44
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