CFE-Fraud-Prevention-and-Deterrence by ACFE Actual Free Exam Q&As

Question 1

During an external audit, the audit team identifies evidence that management has Intentionally manipulated the organization ' s reported revenue amount However, the amount of the resulting misstatement does not meet the quantitative materiality threshold for the audit. Which of the following is TRUE regarding this situation?

A. The auditors should regard the misstatement as immatenal to the audit because the omitted amount is less than the quantitative materiality threshold B. The auditors should only consider the evidence if they can determine that the actions meet the legal definition of fraud. C. The auditors should reconsider the reliability of the audit evidence they have previously obtained. D. The auditors should assume that all audit evidence collected previously is unreliable and withdraw from the audit engagement.

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Correct Answer: C Vote an answer

Question 2

Which of the following Is NOT a way that an organization ' s fraud risk assessment should be Incorporated Into the audit process?

A. 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. B. It should be used to design audit tests to evaluate whether the controls are operating effectively. C. 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. D. It should be used to replace the auditor ' s own identification and assessment of fraud risks.

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Correct Answer: D Vote an answer

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Question 3

Which of the following is a detective anti-fraud control?

A. Fraud awareness training B. Hiring policies and procedures C. Separation of duties D. Independent reconciliations

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Correct Answer: D Vote an answer

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Question 4

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

A. False B. True

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Correct Answer: B Vote an answer

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Question 5

According to ACFE research, which of the following is TRUE?

A. Most employees who commit occupational fraud are first-time offenders. B. Complaints about family problems is the most reported behavioral red flag displayed by fraud perpetrators. C. Frauds committed by staff-level employees cause higher median losses than those committed by owners and executives. D. Men and women commit similar amounts of occupational frauds.

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Correct Answer: A Vote an answer

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Question 6

Which of the following is TRUE regarding G20/OECD Principles of Corporate Governance (the Principles)?

A. The Principles state that an entity ' s corporate governance framework should discourage active cooperation between corporations and stakeholders in creating wealth. B. The Principles are required to be implemented by all corporations in the jurisdictions that have officially adopted them C. The Principles are intended to be applicable in developed economies but not in emerging markets. D. The Principles state that an entity ' s corporate governance framework should ensure the equitable treatment of all shareholders.

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Correct Answer: D Vote an answer

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Question 7

Cho, an internal auditor, and Pierre, a sales manager, have had several disagreements about the sales tactics used by Pierre ' s team. Cho has just been told that she will lead the company ' s fraud risk assessment. During the fraud risk assessment, Cho should:

A. Include her disagreements with Pierre as a factor when assessing the risk of fraud in the sales function. B. Automatically designate the sales function as a high-risk area. C. Request that someone else perform the fraud risk assessment work that is related to the sales function ' s activities. D. Confront Pierre about the disagreements and discuss how they increase the company ' s risk of fraud.

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Correct Answer: C Vote an answer

Question 8

Christopher is conducting an external audit of a company in a jurisdiction that is subject to International Standards on Auditing (ISAs). While conducting his audit procedures, he discovers evidence of a fraud involving Jeffrey, the company's chief executive officer (CEO). Which of the following options is Christopher's BEST response to these findings?

A. Christopher should immediately report his findings to the relevant government authority. B. Christopher should report his findings to those charged with governance of the organization. C. Christopher should not disclose his findings to any other parties due to legal liability. D. Christopher should confront Jeffrey with his audit findings and try to get a confession.

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Correct Answer: B Vote an answer

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Question 9

According to the routine activities theory, all of the following are important elements that influence crime EXCEPT:

A. The absence of capable guardians B. The lack of accountability for misdeeds C. The availability of suitable targets D. The presence of motivated offenders

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Correct Answer: B Vote an answer

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Question 10

According to ACFE research, which of the following is TRUE?

A. Most employees who commit occupational fraud are first-time offenders. B. Men and women commit similar amounts of occupational fraud. C. Complaints about family problems is the most reported behavioral red flag displayed by fraud perpetrators. D. Frauds committed by staff-level employees cause higher median losses than those committed by owners and executives.

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Correct Answer: A Vote an answer

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Question 11

Red works in the Accounting Department and prepares account reconciliations for his company. While following his normal procedures, Red misunderstands a note from a colleague, resulting in incorrect information being included on an account reconciliation that ultimately makes the account appear artificially inflated. Which of the following internal control failures has MOST LIKELY occurred?

A. Breakdown. B. Collusion. C. Error. D. Noncompliance.

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Correct Answer: C Vote an answer

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Question 12

Gian is a manager at Ram Co. and is tasked with building the company ' s fraud risk management program.
As a starting point, Gian wants to formally define the program ' s objectives. Which of the following is TRUE regarding the process of defining the objectives of the fraud risk management program?

A. Gian must ensure that the company ' s investment in the fraud risk management program outweighs the benefit of those controls. B. When expressing the organization ' s risk appetite, Gian should do so without regard to the company ' s culture or operations. C. Gian should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented them. D. Gian must assign both a quantitative and qualitative measure to the company ' s risk appetite to accurately measure the program ' s effectiveness.

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Correct Answer: C Vote an answer

Question 13

Which of the following Is TRUE regarding an organization ' s ethics program?

A. An effective written ethics policy alone is sufficient to communicate management ' s ethical philosophy and serve as a comprehensive ethics program B. All of the above C. In designing the ethics program, management should consider whether the organization currently has any ethical leadership Issues D. To be most effective, access to the organization ' s ethics policy should be restricted to employees and other Internal parties only

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Correct Answer: C Vote an answer

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Question 14

Which of the following options is an example of an anti-fraud control that is primarily preventive in nature?

A. Continuous audit techniques. B. A whistleblower hotline. C. Proactive data analysis techniques. D. Employee background checks.

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Correct Answer: D Vote an answer

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