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

• Question 81:

  Which of the following statements is FALSE regarding an organization's fraud risk management program1?

  A. A Formal sanctions for intentional noncompliance should be well-publicized throughout the company

  B. There should be measures in place to address failures in the design or operation of anti- fraud controls, as well as fraud occurrervces

  C. The program must include mechanisms to monitor and identify breaches in compliance

  D. The responsibility of handling suspected incidences of noncompliance should be delegated to someone outside of the company

  Correct Answer: A

• Question 82:

  International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the prevention and detection of fraud within an organization

  A. True

  B. False

  Correct Answer: B

• Question 83:

  In a company with all of the following parties, who should have primary responsibility for the oversight of the organization s compliance program?

  A. The board of directors

  B. General counsel

  C. Internal audit

  D. The chief ethics officer

  Correct Answer: A

• Question 84:

  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 not relax their skeptical attitudes even if there are no signs of fraudulent activity.

  C. Fraud examiners should form the engagement hypothesis without regard to the available preliminary information

  D. Professional skepticism means beginning all assignments with the belief that something is amiss

  Correct Answer: D

• Question 85:

  The Public Interest Oversight Board (PIOB) is the global body responsible for establishing international corporate governance standards.

  A. True

  B. False

  Correct Answer: B

• Question 86:

  Employee anti-fraud education should:

  A. Include examples of prior employee misconduct and how those situations were handled

  B. Include descriptions of the procedures that management uses to detect fraud.

  C. Be restricted to formal educational mechanisms to reinforce the importance of the message

  D. Be presented by organizational executives or anti-fraud professionals only

  Correct Answer: A

• Question 87:

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

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

  B. The Principles state that an entity's corporate governance framework should encourage active cooperation between corporationfiand stakeholders in creating wealth.

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

  D. The Principles are intended to be applicable in both developed economies and emerging markets

  Correct Answer: D

• Question 88:

  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 feel safe challenging managements decisions

  B. Use a checklist of initiatives to make sure all the elements of a strong tone at the top are in place

  C. Implement two separate sets of ethics policies one for management and one for employees

  D. All of the above

  Correct Answer: D

• Question 89:

  As part of her audit of ABC Corp . Rachel, a CPA. is identifying the risks of material misstatement due to fraud As part of this task, she should evaluate any unexpected relationships that she identified in performing analytical procedures.

  A. True

  B. False

  Correct Answer: A

• Question 90:

  Which of the following is FALSE regarding the fraud risk assessment team?

  A. The team members should have experience in gathering and eliciting information

  B. The team size should be limited to a maximum of three individuals.

  C. The team members might include both internal and external sources D. The team should consist of individuals with diverse knowledge, skills, and perspectives.

  Correct Answer: B