Practice Free CFE Fraud Prevention and Deterrence Exam Online Questions
According to criminologist Charles McCaghy, which of the following is the most compelling factor behind deviance by organizations?
- A . Executive failures
- B . Excessive regulatory requirements
- C . Profit pressure
- D . Unethical corporate culture
Who is ultimately responsible lor ensuring the effectiveness of the organization’s anti-fraud program?
- A . Internal auditors
- B . The compliance function
- C . Management
- D . External auditors
Julia, an internal auditor, is formalizing a process to evaluate the effectiveness of the company’s control system over time, including both ongoing evaluations and periodic, separate evaluations. Julia’s initiative BEST pertains to the component of the Committee of Sponsoring Organizations of the Treadway Commission’s COSO Internal Control―Integrated Framework the Framework:
- A . Control environment
- B . Monitoring
- C . Risk assessment
- D . Control activities
B
Explanation:
The Management’s Fraud-Related Responsibilities chapter defines monitoring as the process that assesses the effectiveness of a control system over time. The manual states that this component should include both ongoing evaluations and periodic separate evaluations, and that the findings should be measured against predefined criteria. This wording matches the question almost exactly. Monitoring also includes timely evaluation and communication of internal control deficiencies to the appropriate parties for corrective action. Because Julia is establishing a process for continuous and separate reviews of control effectiveness over time, her initiative falls squarely within the monitoring component of COSO’s Internal Control―Integrated Framework. None of the other components focus on the continuing evaluation of whether controls remain present and functioning over time in this way.
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
- A . True
- B . False
Which of the following is NOT an effective way to help prevent fraud through the organization’s performance measurement and management programs?
- A . Including ethics-based metrics as a component of performance evaluations
- B . Providing regular training to ensure that all employees are sufficiently prepared to perform their tasks
- C . Establishing loosely defined job descriptions that allow employees flexibility in their roles
- D . Tying employee compensation to reasonable organizational performance goals
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.
- A . True
- B . False
According to the differential reinforcement theory, behavior is weakened when positive rewards are gained or punishment is avoided.
- A . True
- B . False
Formally documenting and communicating organizational hierarchies, including the proper flow of information, can hinder an organization’s fraud prevention initiatives.
- A . True
- B . False
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
Which of the following Is FALSE regarding proactive fraud auditing procedures?
- A . Fraud audit procedures should be designed to incorporate an element of surprise
- B . Analytical review of the financial statements is best used to uncover small frauds that might be missed by other detection methods
- C . Fraud assessment questioning techniques are most appropriately used as part of the normal audit process
- D . Implementing proactive fraud audit procedures demonstrates management’s intention to aggressively look for possible fraudulent conduct