Practice Free CFE Fraud Prevention and Deterrence Exam Online Questions
Mario is charged with implementing a fraud reporting program on behalf of his organization.
Which of the following is a best practice that Mario should follow to ensure that the program is successful?
- A . Inform employees that the names of all individuals who report misconduct will be shared with the organization’s management and law enforcement.
- B . Inform employees that they will be held accountable for reporting any tips that cannot be verified.
- C . Inform employees that they are required to report any information about suspected fraud only to their direct supervisor.
- D . Inform employees that they can make their report anonymously (where permitted by law).
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 . A mandatory independent compensation committee
- B . Shareholder oversight of internal controls
- C . A written charter for management
- D . Adequate audit committee resources and authority
A government auditor is conducting a financial statement audit of a public-sector entity in accordance with the International Standards of Supreme Audit Institutions (ISSAI).
Which of the following is TRUE regarding the auditor’s consideration of fraud during this engagement?
- A . In addition to fraud, the auditor should remain alert to potential occurrences of abuse during the audit.
- B . The auditor has the automatic ability to withdraw from the audit engagement if fraud is found.
- C . The requirements found in International Standard on Auditing (ISA) 240 do not apply to the engagement
- D . The objectives of the audit are likely narrower than those of a private-sector financial statement audit.
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
Which of the following statements is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?
- A . Professional skepticism means beginning all assignments with the belief that something is amiss.
- B . Professional skepticism involves maintaining a mindset that no fraud has occurred
- C . Fraud examiners should form the engagement hypothesis without regard to the available preliminary information.
- D . Fraud examiners should not relax their skeptical attitudes under any circumstances.
Devon, an employee at Tilly Corp., repeatedly demonstrates a negative attitude when working with other departments. To address this behavior, Devon’s manager tells him that he is no longer allowed to lead cross-departmental projects.
This is an example of what type of behavioral response?
- A . Positive reinforcement
- B . Negative reinforcement
- C . Punishment
- D . None of the above
Grace, a Certified Fraud Examiner (CFE), has accepted her first fraud examination engagement. Before beginning the investigation, she reviews the ACFE Code of Professional Ethics to ensure that her behavior will comply with the Code.
Which of the following actions is explicitly prohibited by the ACFE Code of Professional Ethics?
- A . Giving opinions regarding technical matters
- B . Participating in an activity with an undisclosed conflict of interest
- C . Engaging in an activity that is legal within her jurisdiction
- D . Providing conclusions based on discovered evidence
A professional organization’s code of conduct serves which of the following purposes?
- A . It functions as a reference and benchmark for ethical guidance.
- B . It offers fewer and less direct solutions to professional ethical dilemmas than might exist under general ethical principles.
- C . It acts as a substitute for legal and regulatory requirements that apply to the profession.
- D . It replaces the need for individuals to consult their own principles.
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
Pieter, a manager at Solox Corp., oversees the fraud training for the organization’s employees. He is reviewing the training for the coming year.
Which of the following actions should Pieter take to ensure that Solox’s employee anti-fraud education program is effective?
- A . Include detailed descriptions of the organization’s anti-fraud controls.
- B . Include common characteristics that lead individuals to commit fraud.
- C . Restrict training to formal live, in-person sessions required of all full-time, lower-level employees.
- D . Require the training to only be presented by organizational executives or anti-fraud professionals.