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ACFE CFE-Fraud-Prevention-and-Deterrence Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Exam Practice Test

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

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Question 1

Gregory, an internal auditor, and Brandon, the company's purchasing manager, have had several heated disagreements over purchasing procedures and policies. Gregory has just been told that he will be the lead on the company's fraud risk assessment. During the fraud risk assessment. Gregory should:

Options:

A.

Confront Brandon about the disagreements and discuss how they increase the organization's risk of fraud-

B.

Have someone else perform the fraud risk assessment work related to the purchasing function

C.

Include his disagreements with Brandon as a factor when assessing the risk of fraud in the purchasing function.

D.

Automatically designate the purchasing function as a high-risk area.

Question 2

Reporting known incidents of fraud to law enforcement can be an effective fraud prevention mechanism.

Options:

A.

True

B.

False

Question 3

In response to an employee's failure to meet performance expectations, a manager demotes the employee to a junior-level position. This is an example of what type of behavioral response?

Options:

A.

Positive reinforcement

B.

Negative reinforcement

C.

Punishment

D.

None of the above

Question 4

Which of the following is NOT considered a conflict of interest that is prohibited under the ACFE Code of Professional Ethics?

Options:

A.

Accepting an assignment to secretly infiltrate the fraud examiner's employing organization and transmit inside information to another party

B.

Undertaking an engagement that decreases the fraud examiner's ability to perform their duties for their full-time employer

C.

Accepting an assignment to evaluate the anti-fraud controls at an organization in which the fraud examiner is a shareholder, provided the fraud examiner's ownership interest is disclosed

D.

Undertaking engagements for both sides in a case of alleged vendor overbilling

Question 5

In the context of a fraud examination, integrity requires all of the following EXCEPT:

Options:

A.

Trustworthiness

B.

A well-developed sense of moral philosophy

C.

Avoidance of conflicts of interest

D.

Refusal to admit errors

Question 6

_____________Is the criminological theory that presents crime as a conscious decision that can be deterred by reducing opportunities for criminal activity and increasing the personal risk to an Individual of being caught and punished.

Options:

A.

Differential association theory

B.

Routine activities theory

C.

Justification of action theory

D.

Rational choice theory

Question 7

Consistently punishing perpetrators can be an effective fraud prevention mechanism

Options:

A.

True

B.

False

Question 8

International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the establishment of anti-fraud internal controls within an organization.

Options:

A.

True

B.

False

Question 9

To address an employee's consistent failure to meet deadlines, a manager removes the employee's ability to work from home This is an example of what type of behavioral response?

Options:

A.

Positive reinforcement

B.

Negative reinforcement

C.

Punishment

D.

None of the above

Question 10

According to behaviorists such as B. F. Skinner, which of the following scenarios is MOST LIKELY to occur when an undesired behavior is punished?

Options:

A.

The behavior will return when punishment ceases

B.

The behavior will be permanently suppressed

C.

The behavior will occur more frequently.

D.

The behavior will not be affected by the punishment

Question 11

Which of the following is TRUE regarding government auditors' responsibilities to report evidence of potential fraud uncovered during an audit of a public-sector organization's financial statements?

Options:

A.

All government auditors maintain the same requirements for reporting evidence of potential fraud uncovered during a public-sector financial statement audit.

B.

Government auditors are legally prohibited from reporting evidence of potential fraud to any parties outside the organization being audited.

C.

Government auditors' reporting requirements pertaining to fraud are substantially the same as those for external auditors in the private sector.

D.

The requirements for government auditors to report evidence of potential fraud depend on the jurisdiction and the specific audit mandate.

Question 12

Having specialized departments within a company often increases the overall risk ot traud by the organization.

Options:

A.

True

B.

False

Question 13

Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?

Options:

A.

Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented tnem.

B.

Management must balance the investment in anti-fraud controls with the benefit of those controls and the amount of risk it is willing to accept.

C.

Management must assign a quantitative measure to its risk appetite so that it can accurately measure the fraud risk management program’s effectiveness.

D.

Management should tailor the detailed objectives of the fraud risk management program to the organization's specific needs and goals.

Question 14

Professional auditing standards require that auditors incorporate an "element of unpredictability" in the selection of auditing procedures to be performed.

Options:

A.

True

B.

False

Question 15

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

Options:

A.

The team members should have experience in gathering and eliciting information

B.

The team members might include both internal and external sources.

C.

The team size should be limited to a maximum of three individuals

D.

The team should consist of individuals with diverse knowledge, skills, and perspectives

Question 16

Jenny is a highly respected employee at XYZ Corp. Her husband's gambling addiction has caused them to have a significant amount of debt. Jenny begins stealing money from the company to cover her husband's gambling losses. This situation best illustrates which leg of the Fraud Triangle?

Options:

A.

Rationalization

B.

Perceived opportunity

C.

Perceived acquiescence

D.

Perceived non-shareable financial need

Question 17

Which of the following statements about the fraud risk assessment process Is MOST ACCURATE?

Options:

A.

The fraud risk assessment can be effectively conducted by people inside or outside of the organization.

B.

To ensure the independence of the team members, a fraud risk assessment must be conducted by a consultant or other external party.

C.

If the individuals conducting the fraud risk assessment truly believe that fraud could not happen at the organization, then the assessment process should reflect that belief.

D.

The fraud risk assessment is most effective when management's influence on the process is limited

Question 18

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

Options:

A.

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

B.

The assessment should be used to improve employee fraud awareness.

C.

The designation of an area as being high risk does not conclusively mean that fraud is occurring there.

D.

The objective of the assessment is to provide an estimate of the organization's fraud losses.

Question 19

Black a Certified Fraud Examiner (CFE), was hired to conduct a fraud examination He did not find fraud, but in Black's opinion the controls he examined were deficient Under the ACFE Code of Professional Ethics Black is not permitted to express his opinion on the deficient controls.

Options:

A.

True

B.

False

Question 20

Management at ABC Corp. is assessing the company's ethical tone and how it affects the organization's fraud risk. To MOST EFFECTIVELY reinforce an anti-fraud culture, management should:

Options:

A.

Use a checklist of initiatives to make sure all the elements of a strong tone at the lop are in place

B.

Create an environment in which employees are dissuaded from challenging management's decisions

C.

Visibly adhere to the same set of ethics policies that is required of all employees

D.

All of the above

Question 21

Which of the following theories suggests that, when considering the possibility of violating a law. people are likely to ask themselves. "What will my spouse think if they find out?"

Options:

A.

Social control theory

B.

Operant theory

C.

Cognitive theory

D.

Behavioral theory