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ACFE CFE-Fraud-Prevention-and-Deterrence Dumps

Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Questions and Answers

Question 1

The availability of suitable targets, absence of capable guardians, and presence of motivated offenders are the three most important elements that influence crime according to which of the following criminological theories?

Options:

A.

Conditioning theory

B.

Routine activities theory

C.

Rational choice theory

D.

Social control theory

Question 2

Which of the following is NOT a responsibility of the organization's board of directors?

Options:

A.

Serving as the intermediaries between shareholders and management

B.

Acting as guardians of the organization's resources and assets

C.

Directing employees to execute business activities

D.

Assessing the strategy and underlying purpose of management's decisions and actions

Question 3

Which of the following is TRUE regarding prosecutions of white-collar criminals?

Options:

A.

Only a small percentage of perpetrators are punished when an organization deals with a fraud case internally.

B.

Most fraud cases are only handled internally and are not referred to law enforcement for prosecution

C.

The primary reason organizations decline to prosecute fraud cases is a belief that their internal discipline methods are sufficient

D.

When fraud cases are handled internally, an employee is more likely to be suspended or put on probation than to be terminated for their crime.

Question 4

Maria conducted a fraud examination that led to a valid confession of guilt from Rita. In Maria's verbal report to her superiors, she stated that, in her opinion. "Rita is guilty of embezzlement." Maria has just violated the ACFE Code of Professional Ethics.

Options:

A.

True

B.

False

Question 5

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?

Options:

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

Question 6

Gray, an independent Certified Fraud Examiner (CFE), was hired by Green, president of the ABC Corporation, to investigate allegations that one of ABC's employees is taking kickbacks. During the investigation. Gray teams that Green is involved in an unrelated fraud. Under the ACFE Code of Professional Ethics. Gray should:

Options:

A.

Not disclose the information about Green.

B.

Report Green to law enforcement

C.

Tell the company's board of directors about Green.

D.

Resign from the engagement

Question 7

While, a Certified Fraud Examiner (CFE). was hired to conduct a fraud examination She did not find fraud, but. In White's opinion, there were several internal control deficiencies that, if not remediated, could facilitate the occurrence of fraud Under the ACFE Code of Professional Ethics. White may include her opinion on the controls in her report to management.

Options:

A.

True

B.

False

Question 8

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) defines____________ as "a process, effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance."

Options:

A.

Corporate compliance

B.

Fraud risk management

C.

Risk assessment

D.

Internal control

Question 9

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?

Options:

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.

Question 10

Which of the following statements is FALSE regarding an organization's fraud risk management program?

Options:

A.

The program must include mechanisms to monitor and identify breaches in compliance.

B.

The responsibility of handling suspected incidents of noncompliance should be delegated to someone outside of the company.

C.

Formal sanctions for intentional noncompliance should be well-publicized throughout the company

D.

There should be measures in place to address failures in the design or operation of anti-fraud controls, as well as fraud occurrences

Question 11

Employee support programs are a fraud prevention mechanism that addresses which leg of the Fraud Triangle

Options:

A.

Rationalization

B.

Lack of integrity

C.

Opportunity

D.

Pressure

Question 12

Which of the following is a best practice to ensure a successful fraud reporting program?

Options:

A.

The company should communicate that fraud, waste, and abuse are more likely to occur in large organizations than small ones.

B.

The company should require employees with information about potential fraud to report it directly and only to their immediate supervisor.

C.

Employees are held accountable for reporting tips that are not able to be substantiated

D.

Employees should be informed that, to the extent possible, their names will not be disclosed.

Question 13

Smith, a retail sales manager, wants to decrease the level of cash register over-and-short discrepancies among his sales team. According to behaviorist theories, which of the following options would be the MOST EFFECTIVE way for Smith to encourage his team members to keep their cash drawers in balance?

Options:

A.

Offer a bonus to anyone whose drawer reconciles perfectly for sixty days.

B.

Publicly call out and criticize employees whose cash drawers are over or short.

C.

Take away an hour of paid time off for each time the drawer is over or short

D.

Demote employees who continue to have reconciliation discrepancies

Question 14

Which of the following is FALSE regarding a fraud risk assessment?

Options:

A.

The objective of the assessment is to help the organization identify what makes it most vulnerable to fraud.

B.

The assessment should be used to improve employee fraud awareness

C.

The assessment team should consider how employees behave as part of its assessment

D.

The designation of an area as high risk should only occur if the assessment has conclusively revealed that fraud is occurring there.

Question 15

Effectively documenting and communicating organizational hierarchies, including the proper flow of information, can be a helpful tool in preventing fraud.

Options:

A.

True

B.

False

Question 16

XYZ, Inc. Is a specialty retailer of high-end ergonomic office furniture. The company receives a very large order from ABC Company, a new customer in a different country that wants to pay on credit. Which of the following is MOST ACCURATE regarding the due diligence procedures XYZ should perform on ABC before proceeding with this transaction?

Options:

A.

XYZ only needs to undertake due diligence procedures if ABC conducts business in countries with known corruption risks.

B.

XYZ does not need to take any specific procedures to verify ABC's identity before accepting the transaction

C.

XYZ should examine ABC's net worth as part of deciding whether to allow the purchase on credit.

D.

XYZ should perform the same level of due diligence as it would for any other customer to avoid claims of discrimination

Question 17

Which of the following statements is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?

Options:

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.

Question 18

According to the results of behavioral studies, such as those conducted by B. F. Skinner, application of punishment to undesired behavior typically results in which of the following?

Options:

A.

increase in the occurrence of the undesired behavior

B.

No effect on the occurrence of the undesired behavior

C.

Temporary suppression of the undesired behavior

D.

Permanent suppression of the undesired behavior

Question 19

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?

Options:

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.

Question 20

Which of the following is FALSE regarding an organization's anti-fraud policy?

Options:

A.

A detailed anti-fraud policy can make it easier to investigate and punish employees who commit fraud and other dishonest acts.

B.

To avoid legal problems in discharging employees, the anti-fraud policy should not include any specific examples of frau and misconduct.

C.

In developing the anti-fraud policy, management should check with legal counsel regarding any legal considerations with respect to the policy.

D.

One of the most important considerations in developing the anti-fraud policy is to ensure every allegation is handled in a uniform manner.

Question 21

According to Steve Albrecht's research,______is the most common personal characteristic motivating fraudsters, and ________ is the most common organization-environment factor motivating fraudsters.

Options:

A.

High personal debt; lack of separation of duties

B.

Revenge: too much trust in key employees

C.

Living beyond their means, too much trust in key employees

D.

Desire for recognition, lack of separation of duties