CFE-FRAUD-PREVENTION-AND-DETERRENCE Online Practice Questions and Answers

Which of the following statements regarding white-collar defendants is TRUE?

A. The lower the offenders' social status, the more likely they are to be imprisoned

B. They are more likely to be fined than to face prison terms as punishment

C. They are less likely to insist on a trial than other offenders

D. All of the above

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

A. Professional skepticism involves maintaining a mindset that no fraud has occurred

B. Fraud examiners should not relax their skeptical attitudes even if there are no signs of fraudulent activity.

C. Fraud examiners should form the engagement hypothesis without regard to the available preliminary information

D. Professional skepticism means beginning all assignments with the belief that something is amiss

Which of the following is FALSE regarding corporate governance'

A. Effective corporate governance practices are most necessary in an organization in which the owners are not also the individuals responsible for setting and executing the business strategy

B. Effective corporate governance practices are considered to be the foundation of fraud risk management.

C. Corporate governances primary purpose is to ensure the accuracy of the organization's financial reports

D. An entity's corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organization.

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

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

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

C. The assessment should be used to improve employee fraud awareness

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

Which of the following is NOT one of the three general approaches used to control corporate crime?

A. Consumer action to force change

B. Voluntary changes in corporate attitudes and structure

C. Media blacklisting of the organization

D. Strong intervention of the government

According to Diane Vaughan. which of the following factors increases an organization s inherent inclination toward committing crime?

A. Management links employee performance goals with company performance goals

B. Rewards are given to employees who challenge the status quo

C. Management seeks out diversity in attitudes and perspectives when hiring employees

D. All of the above

The objectives of a fraud risk management program include

A. Proactively identifying fraud risks

B. Limiting the damage caused by fraud occurrences

C. Punishing fraud perpetrators

D. All of the above

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

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

B. Management should express risk appetite in a manner that is appropriate for and unique to the organization s culture and operations.

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

D. Management must consider the total amount of fraud risk it is willing to accept when determining fraud risk management objectives

Which of the following is FALSE regarding the discussion about the financial statements susceptibility to fraud that auditors are required to have under International Standard on Auditing (ISA) 240?

A. A The audit team should discuss how management could conceal fraud

B. B. The audit team should consider factors that provide the opportunity for fraud.

C. The audit team should focus solely on how the company's assets could be misappropriated

D. The audit team should consider whether the organizational culture might enable the rationalization of fraud

Jane, a Certified Fraud Examiner (CFE). was hired to conduct a fraud examination at XYZ Company. Her examination did not reveal any conclusive evidence that fraud had occurred or was occurring. Consequently. XYZ's management asked Jane to state in her official examination report that the company is free of fraud as a means of assuring the board of directors that the company's anti-fraud controls were effective. The ACFE Code of Professional Ethics prohibits Jane from complying with management's request

A. True

B. False