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CFE-Fraud-Prevention-and-Deterrence Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Questions and Answers

Questions 4

According to the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control— Integrated Framework (the Framework), there are five interrelated components of a company's internal control. Which of the following is NOT among these five components?

Options:

A.

Control activities

B.

Ethical culture

C.

Risk assessment

D.

Monitoring

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Questions 5

The existence of many specialized departments within a company generally decreases the overall risk of fraud within the organization.

Options:

A.

True

B.

False

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Questions 6

Employee support programs are a fraud prevention mechanism that addresses which leg of the Fraud Triangle

Options:

A.

Rationalization

B.

Lack of integrity

C.

Opportunity

D.

Pressure

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Questions 7

Which of the following would MOST LIKELY be a violation of the ACFE Code of Professional Ethics?

Options:

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

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Questions 8

Which of the following is TRUE regarding the internal audit function's reporting responsibilities pertaining to fraud?

Options:

A.

The internal audit function should discuss how and when to report fraud-related issues with senior management and the board of directors before such issues arise.

B.

The internal audit function is permitted, but not required, to periodically report about the organization's fraud risks to senior management and the board of directors.

C.

The internal audit function should not disclose the results of its fraud audits to senior management or the board of directors in order to maintain independence.

D.

The internal audit function is not permitted to communicate with the board of directors about fraud, as that is the responsibility of external auditors.

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Questions 9

The objectives of a fraud risk management program include:

Options:

A.

Proactively identifying fraud risks

B.

Limiting the damage caused by fraud occurrences

C.

Punishing fraud perpetrators

D.

All of the above

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Questions 10

Which of the following is TRUE regarding corporate governance?

Options:

A.

Fraud risk management is considered to be the foundation of effective corporate governance

B.

Corporate governance's primary purpose is to ensure the accuracy of the organization's financial reports

C.

Effective corporate governance practices are most necessary in an organization in which the owners are also the individuals responsible for setting the corporate strategy.

D.

An entity's corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organization

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Questions 11

ABC. Inc. is a publicly traded, multi-national corporation. Which of the following statements is TRUE regarding the corporate governance requirements that ABC is subject to?

Options:

A.

ABC must comply with specific listing standards for the stock exchange(s) on which it is listed

B.

ABC is required to comply with G20/OECD Principles of Corporate Governance

C.

ABC is not required to comply with any corporate governance requirements because it operates in multiple jurisdictions

D.

ABC is subject to the Universal Corporate Governance Act because it is a publicly traded corporation.

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Questions 12

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?

Options:

A.

Independent monitoring

B.

Operating environment

C.

Risk tolerance

D.

Governance and culture

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Questions 13

Which of the following statements regarding recommended vendor due diligence procedures is MOST ACCURATE?

Options:

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.

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Questions 14

In response to a risk identified during a fraud risk assessment, management decides to implement additional internal control measures. This response is known as:

Options:

A.

Assuming the risk

B.

Mitigating the risk

C.

Avoiding the risk

D.

Transferring the risk

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Questions 15

For Its compliance program to be effective, an organization must perform procedures to ensure management hires only ethical Individuals who exercise a substantial measure of discretion In acting on the organization's behalf

Options:

A.

True

B.

False

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Questions 16

Black a Certified Fraud Examiner (CFE), was hired to conduct a fraud examination He did not find fraud, but in Black's opinion the controls he examined were deficient Under the ACFE Code of Professional Ethics Black is not permitted to express his opinion on the deficient controls.

Options:

A.

True

B.

False

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Questions 17

Which of the following is TRUE regarding G20/OECD Principles of Corporate Governance (the Principles)?

Options:

A.

The Principles are required to be implemented by all corporations in the jurisdictions that have officially adopted them

B.

The Principles state that an entity's corporate governance framework should discourage active cooperation between corporations and stakeholders in creating wealth.

C.

The Principles are intended to be applicable in developed economies but not in emerging markets.

D.

The Principles state that an entity's corporate governance framework should ensure the equitable treatment of all shareholders.

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Questions 18

Which of the following is TRUE regarding the communication of the fraud risk assessment process?

Options:

A.

The more personalized the communication, the more effective it will be in encouraging employees to participate

B.

The communication should be made in a format mat is most appropriate for the culture of the organization

C.

The communication should be visibly disseminated throughout the business

D.

All of the above

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Questions 19

Green, a Certified Fraud Examiner (CFE). had an ethical dilemma regarding her business contract with her professional partners. Which of the following sources of guidance would be considered the lowest level of reference to help Green in determining the most ethical course of action?

Options:

A.

Contract law

B.

Guidance from her family and friends

C.

The ACFE Code of Professional Ethics

D.

Philosophical principles related to ethics

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Questions 20

During a fraud risk assessment, the assessment team determines that it would like to observe the interactions among several employees as they collectively discuss the organization's current fraud awareness training. Which of the following techniques would be MOST HELPFUL for the team to use in gathering this information?

Options:

A.

Focus groups

B.

Surveys

C.

Anonymous feedback mechanisms

D.

Interviews

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Questions 21

Professional auditing standards suggest that auditors incorporate an "element of predictability" in the selection of auditing procedures to be performed so that they ensure the same areas are tested in the same manner during each audit.

Options:

A.

True

B.

False

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Exam Name: Certified Fraud Examiner - Fraud Prevention and Deterrence Exam
Last Update: Dec 2, 2024
Questions: 141
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