ACFE CFE-Fraud-Prevention-and-Deterrence Exam With Confidence Using Practice Dumps

 Board Responsibilities in Fraud Risk Management:

The board plays a critical role in overseeing the organization's fraud risk management activities to ensure accountability and effective governance.

 Why A is Correct:

The board provides high-level oversight but does not typically involve itself in the design or implementation of the fraud risk management program.

 Why Other Options are Incorrect:

B and D:Design and implementation are management responsibilities.

C:Punishment of fraud perpetrators is not directly within the board's purview​​.

The Treadway Commission emphasizes improving internal controls, which include strengthening the internal audit function. Providing adequate resources and authority to the internal audit function ensures that it operates independently and effectively, which is critical for preventing and detecting fraud. The internal audit function can evaluate financial reporting systems, detect irregularities, and provide valuable recommendations for improvement. This recommendation aligns with the goal of reducing fraud and ensuring reliable financial reporting.

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Scope of Fraud Risk Assessment:

The fraud risk assessment team must consider various factors, including:

A. Incentive programs:Can create pressures that lead to fraud.

B. Management override of controls:A key risk for fraud occurring despite existing safeguards.

C. Risks to reputation:Fraud incidents can harm the organization's public image.

Comprehensive Discussion:

Considering all these factors ensures a thorough identification of inherent fraud risks.

Conclusion:The fraud risk assessment team should discuss all listed items.