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

A. To design audit tests to evaluate whether fraud risk controls are operating effectively.

B. To inform the development of audit programs for areas that have been identified as having a high risk of fraud.

C. To validate whether the organization is appropriately managing moderate-to-high fraud risks.

D. To confirm whether there is conclusive evidence that fraud is occurring within the company.

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

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

C. To ensure the independence of the team members, a consultant or another external party must conduct the fraud risk assessment.

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

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

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

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

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

A. Give shareholders oversight of internal controls.

B. Have a mandatory independent compensation committee.

C. Have adequate audit committee resources and authority.

D. Develop a written charter for management.

A. Alicia should focus on potential fraud and does not need to consider the possibility of abuse or other misconduct during the audit engagement.

B. Alicia must comply with the requirements found in International Standard on Auditing 240 as they apply to both private- and public-sector audits.

C. In conducting the audit, Alicia's objectives are likely narrower than those of a private-sector financial statement audit.

D. If Alicia identifies fraud during the audit engagement, she must immediately withdraw from the engagement.

A. Automatically designate the accounts receivable department as a high-risk area.

B. Confront Bridgette about the disagreements and discuss how they increase the department's risk of fraud.

C. Have someone else perform the fraud risk assessment work related to the accounts receivable department's activities.

D. Include her disagreements with Bridgette as a factor when assessing the risk of fraud in the accounts receivable department.

A. A fraud risk management program should incorporate policies and procedures designed to both prevent and detect fraud but should not address fraud responses.

B. A fraud risk management program should include the formal procedures that management takes in response to a fraud, such as rebuilding stakeholders' confidence in the organization.

C. A fraud risk management program should only focus on addressing fraud after it occurs.

D. A fraud risk management program should prioritize activities that proactively identify and assess fraud risks over activities that detect fraud while it is occurring.

A. The organization's objectives and available resources.

B. The organization's internal controls and its financial reporting model.

C. Management's risk appetite and the organization's ability to meet its objectives.

D. Management's risk appetite and relevant regulatory requirements.

A. Susannah should not disclose her findings to any other parties due to client confidentiality.

B. Susannah should Immediately report her findings to the secunties regulators

C. Susannah should confront management with her audit findings and try to get a confession.

D. Susannah should report her findings to the audit committee of the board of directors.

A. None of the above

B. Negative reinforcement

C. Positive reinforcement

D. Punishment

A. It provides more direct solutions to professional ethical dilemmas than might exist under general ethical principles

B. It facilitates practical enforcement and profession-wide Internal discipline.

C. It serves as a reference and benchmark for ethical guidance

D. It replaces the need for individuals to consult their own conscience.

A. Tell White that she will try to keep the information as confidential as possible

B. Take White's request straight to ABC Corp.'s management

C. Not agree to the request for confidentiality

D. Agree that the information will be held in confidence, even though Blue knows it will not be

A. Accepting an assignment to assess red flags of fraud at an organization in which the fraud examiner is a partner, provided the fraud examiner's ownership interest is disclosed

B. Undertaking engagements for both sides in a case of an alleged product substitution scheme

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

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

A. The auditors should assume that all audit evidence collected previously is unreliable and withdraw from the audit engagement

B. The auditors do not need to be concerned with this evidence, as asset misappropriation schemes are not considered relevant or material for external audit purposes.

C. The auditors can ignore the misstatement because the omitted amount is less than the quantitative materiality threshold and therefore immaterial to the audit.

D. The auditors should assess the need to adjust the nature, timing, and extent of remaining audit procedures based on this evidence.

A. Anti-competitive practices

B. Insider trading

C. Conflicts of interest

D. Fraudulent customer payments