Latest Nov 23, 2022 CFE-Fraud-Prevention-and-Deterrence Brain Dump: A Study Guide with Tips & Tricks for passing Exam
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NEW QUESTION 72
In developing a corporate governance framework for an organization, directors and management must consider which of the following?
- A. The organization s legal and regulatory environment
- B. The organization s cultural environment
- C. All of the above
- D. The organization s ethical environment
Answer: C
NEW QUESTION 73
According to modern criminological studies, which of the following is the determinant aspect of white-collar crime'?
- A. Organizational opportunity
- B. Absence of risk factors
- C. Social status
- D. Potential legal punishment
Answer: C
NEW QUESTION 74
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. Operating environment
- B. Governance and culture
- C. Risk tolerance
- D. Independent monitoring
Answer: D
NEW QUESTION 75
Which of the following Is NOT Included In Ihe five fraud risk management principles described In Fraud Risk Management Guide, a joint publication by COSO and the ACFE?
- A. Deploying preventive and detective fraud control activities to mitigate fraud risk
- B. Developing one-time evaluations for each fraud risk management principle
- C. Performing comprehensive fraud risk assessments to identify specific fraud schemes
- D. Communicating the expectations of those governing the fraud risk management program
Answer: B
NEW QUESTION 76
Which of the following statements regarding recommended vendor due diligence procedures is MOST ACCURATE?
- A. An organization should subject vendors to an internal audit conducted by the organization's own auditors before agreeing to do business with them.
- B. An organization should avoid revealing that it is seeking information about potential vendors prior to starting a relationship with them.
- C. An organization should request that new vendors fill out a questionnaire about their background immediately after signing a contract with them.
- D. An organization should include a clause in the contract requiring the vendor to report any misconduct before entering into an agreement with them.
Answer: D
NEW QUESTION 77
According to International Organization for Standardization (ISO) 31000 2018. an organization's risk management program should be proportionate to the organization s specific operations and objectives.
- A. False
- B. True
Answer: B
NEW QUESTION 78
Which of the following statements is FALSE?
- A. Conducting covert audits is among the most effective fraud prevention methods
- B. Most experts agree that it is harder to detect frauds than to prevent them
- C. Controls do little good in preventing theft and fraud if those at risk do not know of their presence
- D. Educating employees about company hotlines and reporting programs increases their perception of detection
Answer: C
NEW QUESTION 79
Which of the following principles of corporate governance pertains to the duty of the organization to act in the best interest of society?
- A. Responsibility
- B. Fairness
- C. Accountability
- D. Transparency
Answer: B
NEW QUESTION 80
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 Immediately report her findings to the secunties regulators
- B. Susannah should confront management with her audit findings and try to get a confession.
- 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 81
A report by a fraud examiner is privileged from disclosure by anyone other than the client
- A. False
- B. True
Answer: B
NEW QUESTION 82
Which of the following Is NOT considered a conflict of Interest that Is prohibited under the ACFE Code of Professional Ethics?
- A. Accepting an assignment to assess red flags of fraud at an organization in which the fraud examiner is a partner, provided the fraud examiner's ownership interest is disclosed
- B. Accepting an assignment to secretly infiltrate the fraud examiner's employing organization and transmit inside information to another party
- C. Undertaking an engagement that decreases the fraud examiner's ability to perform their duties for their full-time employer
- D. Undertaking engagements for both sides in a case of an alleged product substitution scheme
Answer: A
NEW QUESTION 83
Which of the following statements is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?
- A. Professional skepticism involves maintaining a mindset that no fraud has occurred
- B. Fraud examiners should form the engagement hypothesis without regard to the available preliminary information
- C. Fraud examiners should not relax their skeptical attitudes even if there are no signs of fraudulent activity.
- D. Professional skepticism means beginning all assignments with the belief that something is amiss
Answer: D
NEW QUESTION 84
Consistently punishing perpetrators can be an effective fraud prevention mechanism
- A. False
- B. True
Answer: B
NEW QUESTION 85
Which of the following would most likely be a violation of the ACFE Code of Professional Ethics?
- A. Green, a CFE. uncovered several material internal control deficiencies unrelated to the financial statement fraud he was investigating. In his final report to management. Green included information about the deficiencies even though they were unrelated to the situation he was hired to investigate.
- B. Stephanie, a CFE. accepted a fraud examination assignment and then instructed a lower-level employee to assess the company's cash records for signs of fraud She took his word when he said there was no evidence of wrongdoing and ended up failing to uncover a very costly fraud scheme.
- C. Susan, a CFE was hired by a client to conduct a fraud examination but found nothing amiss A year later, she received a legal order from the local prosecutor's office to provide the client's file Susan complied with the court order, even though she did not have the client's authorization to do so
- D. All of the above are violations
Answer: B
NEW QUESTION 86
In response to an employee s failure to meet performance expectations. a manager demotes the employee to a junior-level position This is an example of what type of behavioral response?
- A. Punishment
- B. Positive reinforcement
- C. Negative reinforcement
- D. None of the above
Answer: D
NEW QUESTION 87
The objective of anti-fraud controls is to:
- A. Completely eliminate residual fraud risk
- B. Completely eliminate inherent fraud risk
- C. Reduce the inherent fraud risk to a level that is significantly smaller than the residual fraud risk.
- D. Reduce the residual fraud risk to a level that is significantly smaller than the inherent fraud risk
Answer: A
NEW QUESTION 88
Which of the following is FALSE regarding corporate governance'
- A. An entity's corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organization
- B. Effective corporate governance practices are most necessary in an organization in which the owners are not also the individuals responsible for setting and executing the business strategy
- C. Effective corporate governance practices are considered to be the foundation of fraud risk management.
- D. Corporate governances primary purpose is to ensure the accuracy of the organizations financial reports
Answer: B
NEW QUESTION 89
Professional auditing standards require that auditors incorporate an "element of unpredictability" in the selection of auditing procedures to be performed.
- A. False
- B. True
Answer: B
NEW QUESTION 90
The generation and use of relevant, quality information to support the functioning of internal control is a principle related to which component of the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) Internal Control-Integrated Framework (the Framework)?
- A. Control environment
- B. Risk assessment
- C. Monitoring
- D. Information and communication
Answer: B
NEW QUESTION 91
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