ACFE Certified Fraud Examiner CFE-FRAUD-PREVENTION-AND-DETERRENCE Questions & Answers

• Question 11:

  Which of the following is NOT considered a conflict of interest that is prohibited under the ACFE Code of Professional Ethics? )

  A. Undertaking an engagement that decreases the fraud examiner's ability to perform their duties for their full-time employer

  B. 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

  C. Undertaking engagements for both sides in a case of an alleged product substitution scheme

  D. Accepting an assignment to secretly infiltrate the fraud examiner s employing organization and transmit inside information to another party

  Correct Answer: C

• Question 12:

  According to Silk and Vogel's research, business leaders rationalize legal violations by asserting that the damage done by the violations is diffused among a large number of parties.

  A. True

  B. False

  Correct Answer: A

• Question 13:

  Which of the following statements regarding document retention policies (DRPs) is TRUE?

  A. Document retention policies do not need to include protocols for preserving electronic documents as most IT systems automatically preserve copies of such data

  B. When establishing a document retention policy, management should consider any industry-specific rules for documenting and regaining records

  C. An effective document retention policy permits the organization to continue the destruction of documents when faced with potential litigation

  D. All of the above

  Correct Answer: D

• Question 14:

  Which of the following is FALSE regarding proactive fraud auditing procedures?

  A. Implementing proactive fraud audit procedures demonstrates management's intention to aggressively seek out possible fraudulent conduct

  B. Fraud audit procedures should be designed to incorporate an element of surprise.

  C. Analytical review of the financial statements is best used to uncover small frauds that might be missed by other detection methods

  D. Fraud assessment questioning techniques are most appropriately used as part of the normal audit process

  Correct Answer: C

• Question 15:

  Article II of the ACFE Code of Professional Ethics prohibits illegal or unethical conduct, but it allows exceptions for unknowing violations of the law

  A. True

  B. False

  Correct Answer: B

• Question 16:

  Which of the following is NOT explicitly prohibited by the ACFE Code of Professional Ethics?

  A. Participating in an activity where there is an undisclosed conflict of interest

  B. Engaging in behavior that is against the law

  C. Drawing conclusions based upon evidence

  D. Acting in a way that could be deemed unethical by the industry

  Correct Answer: C

• Question 17:

  For its compliance program lo 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.

  A. True

  B. False

  Correct Answer: A

• Question 18:

  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. Transparency

  D. Accountability

  Correct Answer: B

• Question 19:

  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. True

  B. False

  Correct Answer: A

• Question 20:

  Open-door management policies are a fraud prevention mechanism that addresses which leg of the Fraud Triangle?

  A. Opportunity

  B. Willingness

  C. Lack of integrity

  D. Pressure

  Correct Answer: A