Practice Free CFE Fraud Prevention and Deterrence Exam Online Questions
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 increased constraints of the regulatory environment for businesses
- D . The increased opportunity for wrongdoing as a result of advancing information technologies
Formally documenting and communicating organizational hierarchies, including the proper flow of information, can hinder an organization’s fraud prevention initiatives.
- A . True
- B . False
Which of the following Is NOT Included In Ihe five fraud risk management principles described.
In Fraud Risk Management Guide, a joint publication by COSO and the ACFE?
- A . Communicating the expectations of those governing the fraud risk management program
- B . Performing comprehensive fraud risk assessments to identify specific fraud schemes
- C . Deploying preventive and detective fraud control activities to mitigate fraud risk
- D . Developing one-time evaluations for each fraud risk management principle
According to ACFE research, the most common method for detecting occupational fraud is:
- A . Tips
- B . Internal audit
- C . External audit
- D . Management review
Which of the following is a responsibility of an organization’s board of directors?
- A . Serving as the intermediary between staff-level employees and management.
- B . Assessing the strategy and underlying purpose of management’s decisions and actions.
- C . Electing the company shareholders and supervising their decisions and actions.
- D . Directing employees to organize and execute business activities.
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.
Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?
- A . Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented tnem.
- B . Management must balance the investment in anti-fraud controls with the benefit of those controls and the amount of risk it is willing to accept.
- C . Management must assign a quantitative measure to its risk appetite so that it can accurately measure the fraud risk management program’s effectiveness.
- D . Management should tailor the detailed objectives of the fraud risk management program to the organization’s specific needs and goals.
Alicia, a government auditor, is conducting a financial statement audit of a public-sector entity in accordance with the International Standards of Supreme Audit Institutions.
Which of the following is TRUE regarding Alicia’s consideration of fraud during this engagement?
- A . In conducting the audit, Alicia’s objectives are likely narrower than those of a private-sector financial statement audit.
- B . Alicia must comply with the requirements found in International Standard on Auditing 240 as they apply to both private- and public-sector audits.
- C . Alicia should focus on potential fraud and does not need to consider the possibility of abuse or other misconduct during the audit engagement.
- D . If Alicia identifies fraud during the audit engagement, she must immediately withdraw from the engagement.
Timothy, a new Certified Fraud Examiner (CFE), has been tasked with his first fraud examination engagement.
To exercise appropriate professional skepticism as he conducts the engagement, Timothy should:
- A . Begin the engagement with the belief that no fraud has occurred.
- B . Maintain a skeptical attitude throughout the entire engagement even if the evidence shows no signs of fraudulent activity.
- C . Maintain professional skepticism that can only be dispelled by evidence.
- D . Form the engagement hypothesis without consideration for the nature of the assignment.
Patrick is conducting an external audit of a company in a jurisdiction that is subject to International Standards on Auditing (ISAs). While undertaking his audit procedures, he discovers evidence that senior management has been fraudulently manipulating the financial statements.
Which of the following is Patrick’s BEST response to these findings?
- A . Patrick should confront management with his audit findings and try to get a confession.
- B . Patrick should immediately report his findings to local law enforcement authorities.
- C . Patrick should not disclose his findings to any other parties due to client confidentiality
- D . Patrick should report his findings to those charged with governance of the organization.