Practice Free CFE Fraud Prevention and Deterrence Exam Online Questions
Which of the following is NOT one of the three elements that have the most influence on crime according to the routine activities theory?
- A . The presence of motivated offenders
- B . The absence of capable guardians
- C . The lack of societal ethics
- D . The availability of suitable targets
Which of the following Is one of the components of the Committee of Sponsoring Organizations of the Treadway Commission’s (COSO) Enterprise Risk Management―Integrating with Strategy and Performance?
- A . Independent monitoring
- B . Operating environment
- C . Risk tolerance
- D . Governance and culture
During a fraud risk assessment, the assessment team is seeking information on the ethical tone set by upper and middle managers. The team members determine that, for this task, they would like to get candid one-on-one feedback from employees away from their peers.
Which of the following techniques would be most helpful for them to use in gathering this information?
- A . Interviews
- B . Focus groups
- C . Anonymous feedback mechanisms
- D . Surveys
Which of the following is LEAST LIKELY to be a factor that directors and management should consider when developing a corporate governance framework for an organization?
- A . The organization’s cultural environment
- B . The organization’s legal and regulatory environment
- C . The organization’s physical operating environment
- D . The organization’s ethical environment
According to ACFE research, which of the following is TRUE regarding prosecutions of white-collar criminals?
- A . The most common internal response to a substantiated fraud case is to terminate the employee.
- B . Only a small percentage of perpetrators are punished when an organization handles a fraud case internally.
- C . Most fraud cases are only handled internally and are not referred to law enforcement for prosecution.
- D . The primary reason that organizations decline to prosecute fraud cases is a lack of evidence.
Which of the following components of the Committee of Sponsoring Organizations of the Treadway Commission’s COSO Enterprise Risk Management―Integrating with Strategy and Performance refers to an organization’s ability to continually assess how well its enterprise risk management ERM capabilities and practices have increased value over time and how they will continue to drive value for the organization?
- A . Governance and culture
- B . Review and revision
- C . Strategy and objective-setting
- D . Risk tolerance
B
Explanation:
The Fraud Risk Management chapter summarizes the components of COSO ERM 2017 and explains that review and revision concerns how well ERM capabilities and practices have increased value over time and how they will continue to drive value for the organization. The manual quotes this concept directly when discussing review and revision. This component is concerned with assessing substantial changes, reviewing risk and performance, and improving ERM practices as circumstances evolve. It is therefore the part of the framework most closely associated with continual reassessment and enhancement over time. Governance and culture, by contrast, address tone, oversight, and ethical values, while strategy and objective-setting concern alignment with mission and performance goals. Thus, option B is the correct answer according to the manual’s presentation of COSO ERM.
Susannah Is conducting an external audit of a company In a jurisdiction that is subject to International Standards on Auditing (ISAs). While undertaking her audit procedures, she discovers evidence that senior management has been fraudulently manipulating the financial statements.
Which of the following is Susannah’s BEST response to these findings?
- A . Susannah should confront management with her audit findings and try to get a confession.
- B . Susannah should Immediately report her findings to the secunties regulators
- C . Susannah should report her findings to the audit committee of the board of directors.
- D . Susannah should not disclose her findings to any other parties due to client confidentiality.
Eliece, a Certified Fraud Examiner (CFE), and Jewel are employees at Silver Inc. Jewel informs Eliece that she has knowledge of a potential financial statement fraud but does not feel comfortable sharing this information unless Eliece can promise that she will keep it confidential.
How should Eliece respond?
- A . Eliece should immediately contact management at Silver Inc. to provide information about her conversation with Jewel and her request for confidentiality.
- B . Eliece should promise Jewel that she will keep the information confidential even though she knows that she will likely be unable to keep that promise.
- C . Eliece should encourage Jewel to report the information to law enforcement because she cannot agree to Jewel’s request.
- D . Eliece should tell Jewel that she will try to keep the information as confidential as possible but she might have an ethical obligation to inform their employer.
Which of the following statements is FALSE?
- A . Controls are not effective in preventing theft and fraud If those at risk do not know of their presence
- B . Most experts agree that it is harder to detect frauds than to prevent them
- C . Educating employees about company hotlines and reporting programs increases their perception of detection
- D . Conducting covert audits is among the most effective fraud prevention methods
A report by a fraud examiner is privileged from disclosure by anyone other than the client.
- A . True
- B . False