Online CFE-Fraud-Prevention-and-Deterrence Questions Video

Steve Albrecht's Research on Fraud Motivation:

Personal factors like "living beyond their means" are commonly cited as a driver of fraudulent behavior.

Organizational factors, such as excessive trust in key employees, create opportunities for fraud by reducing oversight and enabling unethical behavior.

Analysis of Options:

A. High personal debt:This can be a motivator, but it is less common than "living beyond their means."

B. Revenge:Rarely a primary driver of fraud.

D. Desire for recognition:This may motivate some individuals, but it is not as prevalent as financial pressure and opportunity.

Conclusion:Option C reflects the most common personal and organizational factors motivating fraudsters.

Comprehensive and Detailed in Depth Explanation:

The G20/OECD Principles of Corporate Governance advocate for transparent and fair markets and the efficient allocation of resources, making Option A the correct statement. These principles are internationally recognized as a standard for policy makers, investors, corporations, and other stakeholders worldwide. The principles are intended to apply to both developed and emerging markets, not justemerging ones (rejecting Option C), and while influential, they are not legally binding mandates (rejecting Option D). They also support the equitable treatment of shareholders, regardless of share class (rejecting Option B).

Proactive Fraud Auditing Procedures:

Analytical reviews are effective for identifying large or unusual trends and anomalies, not necessarily small frauds.

Other tools, such as detailed transaction testing, are better suited for uncovering small frauds.

Analysis of Other Options:

A. Element of surprise:A key feature of fraud audits.

C. Fraud assessment questioning:Valid as part of the audit process.

D. Management’s intentions:Proactive procedures signal a strong stance against fraud.

Conclusion:Option B is false because analytical reviews are better at detecting significant anomalies rather than small frauds.

ACFE Code of Professional Ethics Overview:

The Code explicitly prohibits unethical behavior, undisclosed conflicts of interest, and illegal activities. However, drawing evidence-based conclusions is encouraged as part of professional practice.

Why B is Correct:

Drawing conclusions based on evidence is central to the fraud examination process and is explicitly supported by ACFE standards.

Why Other Options are Prohibited:

A, C, and D:Engaging in unethical, conflicting, or illegal activities violates ACFE ethical guidelines​​.

References for All Questions:

ACFE Fraud Examination Guide and Code of Professional Ethics​​.

Best practices for fraud risk assessment and reporting​​.

Reporting standards and ethics in fraud examination​​.