Practice Free CFE Fraud Prevention and Deterrence Exam Online Questions
Fraud risks related to corruption include all of the following EXCEPT;
- A . Receipt of kickbacks
- B . Espionage by competitors
- C . Payment of bribes
- D . Aiding and abetting vendor fraud
Which of the following Is one of the recommendations made by the National Commission on Fraudulent Financial Reporting (the Treadway Commission) to reduce the probability of fraud in financial reports?
- A . Give shareholders oversight of hotline reporting programs
- B . Have adequate compensation committee resources and authority
- C . Develop a written charter for management
- D . Have a mandatory independent audit committee
During an external audit of an organization’s financial statements, Saskia, the external auditor, uncovers significant internal control deficiencies at the organization. She believes these deficiencies could result in a material misstatement of the financial statements.
Which of the following should Saskia do regarding these findings?
- A . Saskia should provide a written communication about her findings to the relevant regulatory agencies.
- B . Saskia should suspend the current audit engagement and begin a new audit focused on the internal control deficiencies.
- C . Saskia should communicate the deficiencies in writing to those charged with governance.
- D . Saskia should withdraw from the audit engagement immediately and issue a disclaimer on any prior work performed.
Which of the following statements regarding monitoring employees for warning signs of fraud is MOST ACCURATE?
- A . Employees should be made aware that management is watching for unexplained lifestyle and behavioral changes that might indicate fraudulent conduct.
- B . An increase in employee wealth is always a sign of fraud that should be investigated.
- C . Employees who steal do not commonly display lifestyle or behavioral warning signs of their misdeeds.
- D . Managers should be instructed that it is a violation of employee privacy rights to monitor employees for behaviors that are indicative of fraud.
Which of the following is a detective anti-fraud control?
- A . Hiring policies and procedures
- B . Independent reconciliations
- C . Separation of duties
- D . Fraud awareness training
While, a Certified Fraud Examiner (CFE). was hired to conduct a fraud examination She did not find fraud, but. In White’s opinion, there were several internal control deficiencies that, if not remediated, could facilitate the occurrence of fraud Under the ACFE Code of Professional Ethics. White may include her opinion on the controls in her report to management.
- A . True
- B . False
Rhys, a Certified Fraud Examiner (CFE), was hired to conduct a fraud examination at Marvel Company. His examination did not reveal any conclusive evidence that fraud had occurred or was occurring. Consequently, Marvel’s management asked Rhys to state in his official examination report that the company is free of fraud as a means of assuring the board of directors that the company’s anti-fraud controls were effective.
Which of the following is TRUE regarding the ACFE Code of Professional Ethics in this situation?
- A . The ACFE Code of Professional Ethics allows Rhys to comply with management’s request without limitations.
- B . The ACFE Code of Professional Ethics allows Rhys to comply with management’s request only if he can find another CFE to co-sign his report.
- C . The ACFE Code of Professional Ethics allows Rhys to comply with management’s request only if the company has liability insurance to cover an incorrect assertion.
- D . The ACFE Code of Professional Ethics absolutely prohibits Rhys from complying with management’s request.
According to International Organization for Standardization (ISO) 31000:2018, an effective and efficient risk management program contains all of the following principles EXCEPT:
- A . The program is structured and comprehensive.
- B . The program is based upon the best available information.
- C . The program is integrated into only high-risk organizational activities.
- D . The program is customized and proportionate to the organization’s operations and objectives.
Which of the following is TRUE regarding the communication of the fraud risk assessment process?
- 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
Which of the following is FALSE regarding a fraud risk assessment?
- A . The objective of the assessment is to help the organization identify what makes it most vulnerable to fraud.
- B . The assessment should be used to improve employee fraud awareness
- C . The assessment team should consider how employees behave as part of its assessment
- D . The designation of an area as high risk should only occur if the assessment has conclusively revealed that fraud is occurring there.