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

• Question 41:

  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?

  A. Ethical culture

  B. Risk assessment

  C. Control activities

  D. Monitoring

  Correct Answer: A

• Question 42:

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

  A. The communication should be in the form of a personalized message from the assessment sponsor

  B. The communication should actively encourage employees to participate in the assessment process

  C. The communication should be visibly disseminated throughout the business

  D. All of the above

  Correct Answer: D

• Question 43:

  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. Risk assessment

  B. Control environment

  C. Monitoring

  D. Information and communication

  Correct Answer: A

• Question 44:

  Jenny is a highly respected employee at XYZ Corp Her husbands gambling addiction has caused them to have a significant amount of debt Jenny begins stealing money from the company to cover her husbands gambling losses. This situation best illustrates which leg of the Fraud Triangle?

  A. Perceived opportunity

  B. Rationalization

  C. Perceived non-shareable financial need

  D. Perceived acquiescence

  Correct Answer: C

• Question 45:

  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. A The audit team should discuss how management could conceal fraud

  B. B. The audit team should consider factors that provide the opportunity for fraud.

  C. The audit team should focus solely on how the company's assets could be misappropriated

  D. The audit team should consider whether the organizational culture might enable the rationalization of fraud

  Correct Answer: D

• Question 46:

  According to the authors of Crimes of the Middle Classes, all of the following factors have contributed to the rising problem of economic crime EXCEPT:

  A. The continued pressures of a culture that rewards affluence and success

  B. The economy's increased reliance on credit

  C. The decrease in funds available from government assistance programs

  D. The increased opportunity for wrongdoing as a result of advancing information technologies

  Correct Answer: D

• Question 47:

  According to the 2018 Report to the Nations, which of the following is the most common method by which frauds are detected?

  A. Confession

  B. External audit

  C. Tips

  D. Internal audit

  Correct Answer: C

• Question 48:

  The theory of differential association is used frequently to explain white-collar criminality Which of the following is NOT one of the assertions or principles of differential association?

  A. Criminal behavior is learned from other people in a process of communication

  B. Criminal behavior is learned using the same mechanisms as other learning

  C. Criminal behavior is acquired through participation with intimate personal groups

  D. The process of learning criminal behavior Is the same as pure imitation

  Correct Answer: C

• Question 49:

  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. Financial statement fraud, corruption

  B. Asset misappropriation; financial statement fraud

  C. Asset misappropriation; corruption

  D. Corruption; asset misappropriation

  Correct Answer: C

• Question 50:

  In developing a corporate governance framework for an organization, directors and management must consider which of the following?

  A. The organization s cultural environment

  B. The organization s legal and regulatory environment

  C. The organization s ethical environment

  D. All of the above

  Correct Answer: D