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

Corporate compliance

Fraud risk management

Risk assessment

Internal control

Fraud risk management is considered to be the foundation of effective corporate governance

Corporate governance's primary purpose is to ensure the accuracy of the organization's financial reports

Effective corporate governance practices are most necessary in an organization in which the owners are also the individuals responsible for setting the corporate strategy.

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

The continued pressures of a culture that rewards affluence and success

The economy's increased reliance on credit

The increased constraints of the regulatory environment for businesses

The increased opportunity for wrongdoing as a result of advancing information technologies

It should be used to assess whether there is a moderate-to-high risk of management overriding controls within the moderate-to-high fraud risk areas.

It should be used to replace the auditor's own identification and assessment of fraud risks.

it should be used to increase awareness in the development of audit programs for areas that have been identified as having a moderate-to-high risk of fraud.

It should be used to design audit tests to evaluate whether the controls are operating effectively.

Green a CFE, uncovered several material internal control deficiencies unrelated to the financial statement fraud he was investigating. In his final report to management. Green included information about the deficiencies even though they were unrelated to the situation he was hired to investigate.

Stephanie, a CFE, accepted a fraud examination assignment and then instructed a lower-level employee to assess the company's cash records for signs of fraud. She took his word when he said there was no evidence of wrongdoing and ended up failing to uncover a very costly fraud scheme.

Susan, a CFE, was hired by a client to conduct a fraud examination but found nothing amiss A year later, she received a legal order from the local prosecutor's office to provide the client's file. Susan complied with the court order, even though she did not have the client's authorization to do so.

All of the above are violations

Fraud audit procedures should be designed to incorporate an element of surprise

Analytical review of the financial statements is best used to uncover small frauds that might be missed by other detection methods

Fraud assessment questioning techniques are most appropriately used as part of the normal audit process

Implementing proactive fraud audit procedures demonstrates management's intention to aggressively look for possible fraudulent conduct

The fraud risk assessment report should be delivered in a style most suited to the language of the business

The fraud risk assessment report should contain a detailed, comprehensive list of every assessment finding

A fraud risk assessment report should reflect the assessment team's subjective perspective regarding the risks identified

All of the above

Elena should suspend the audit and begin a new audit focused on the internal controls

Elena should report the findings in writing to the appropriate law enforcement agencies.

Elena should provide a written communication about the findings to senior management.

Elena should work independently to correct the underlying internal control deficiency.

The most commonly reported red flag displayed by fraud perpetrators prior to the detection of their crime is complaints about management.

Mote occupational frauds are committed by men than by women

The median losses caused by executives are lower than those caused by staff-level employees

The majority of fraudsters have been previously punished by an employer for a fraud-related offense

Overseeing the organization's fraud risk management activities

Designing the fraud risk management program

Punishing fraud perpetrators discovered through fraud risk management activities

Implementing the fraud risk management program

True

False

increase in the occurrence of the undesired behavior

No effect on the occurrence of the undesired behavior

Temporary suppression of the undesired behavior

Permanent suppression of the undesired behavior

In addition to fraud, the auditor should remain alert to potential occurrences of abuse during the audit.

The auditor has the automatic ability to withdraw from the audit engagement if fraud is found.

The requirements found in International Standard on Auditing (ISA) 240 do not apply to the engagement

The objectives of the audit are likely narrower than those of a private-sector financial statement audit.

True

False

True

False

True

False

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

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

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

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.

True

False