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

COSO Definition of Internal Control:

COSO defines internal control as a process enacted by an entity's board, management, and personnel to provide reasonable assurance regarding objectives in operations, reporting, and compliance.

Analysis of Options:

A. Operational risk assessment:A component of internal control, not the overall process.

C. Fraud risk management:Focuses specifically on fraud risks, a subset of internal control.

D. Financial reporting:A specific objective addressed by internal control.

Conclusion:The correct answer is internal control, as defined by COSO.

Comprehensive and Detailed in Depth Explanation:

The COSO framework outlines monitoring as one of its five core components, which involves evaluating the effectiveness of internal controls over time. Monitoring includes both ongoing evaluations and separate evaluations, which is exactly what Julia is initiating. This distinguishes monitoring (correct) from control activities (which pertain to execution of policies), risk assessment (which identifies and analyzes risks), and control environment (which is the tone at the top).

Defining Fraud Risk Management Objectives:

Management should focus on tailoring objectives to the organization's needs, examining past fraud incidents, and balancing costs with benefits. Assigning a quantitative measure to risk appetite, while potentially useful, is not a requirement for effective fraud risk management.

Analysis of Options:

A. Examining previous frauds:This helps identify vulnerabilities and design controls.

B. Balancing costs and benefits:Essential to ensure the program's efficiency and feasibility.

D. Tailoring objectives:Necessary for aligning the program with organizational goals.

Conclusion:Option C is false because assigning a quantitative measure to risk appetite is not mandatory in defining fraud risk management objectives.