Free Certified Fraud Examiner – Fraud Prevention and Deterrence Exam CFE-Fraud-Prevention-and-Deterrence Exam Practice Test

Green, a Certified Fraud Examiner (CFE). had an ethical dilemma regarding her business contract with her professional partners. Which of the following sources of guidance would be considered the lowest level of reference to help Green in determining the most ethical course of action?

• Contract law
• Guidance from her family and friends
• The ACFE Code of Professional Ethics
• Philosophical principles related to ethics

According to the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control-integrated Framework (the Framework), there are five interrelated components of a company's internal control. Which of the following is NOT among these five components?

• Monitoring
• Control environment
• Independent oversight
• Information and communication

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?

• All government auditors maintain the same requirements for reporting evidence of potential fraud uncovered during a public-sector financial statement audit.
• Government auditors are legally prohibited from reporting evidence of potential fraud to any parties outside the organization being audited.
• Government auditors' reporting requirements pertaining to fraud are substantially the same as those for external auditors in the private sector.
• The requirements for government auditors to report evidence of potential fraud depend on the jurisdiction and the specific audit mandate.

According to the 2020 Report to the Nations.___________schemes ate the MOST COMMON form of occupational fraud,while_________schemes are the MOST COSTLY form of occupational fraud.

• Asset misappropriation; corruption
• Corruption, asset misappropriation
• Financial statement fraud: corruption
• Asset misappropriation: financial statement fraud

According to Silk and Vogel's research, business leaders rationalize legal violations by asserting that compliance with government regulations is too costly and cuts too heavily into company profits.

• True
• False

Maria conducted a fraud examination that led to a valid confession of guilt from Rita. In Maria's verbal report to her superiors, she stated that, in her opinion. 'Rita is guilty of embezzlement.' Maria has just violated the ACFE Code of Professional Ethics.

• True
• False

Blue. Inc. is a specialty retailer of customized shipping containers. The company receives a very large order from Green Company, a new customer from a country that is known to have high corruption risks. Which of the following is MOST ACCURATE regarding the due diligence procedures Blue should perform on Green before proceeding with this transaction?

• Blue should consider Green's expected purchasing pattern and method of payment in determining whether to accept the transaction.
• Blue only needs to undertake due diligence procedures if Green is requesting to pay on credit.
• Blue should perform the same level of due diligence as it would for any other customer to avoid claims of discrimination.
• Blue does not need to undertake any specific due diligence procedures for this transaction.

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

• The objective of the assessment is to help the organization identify what makes it most vulnerable to fraud.
• The assessment should be used to improve employee fraud awareness
• The assessment team should consider how employees behave as part of its assessment
• The designation of an area as high risk should only occur if the assessment has conclusively revealed that fraud is occurring there.

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:

• Use a checklist of initiatives to make sure all the elements of a strong tone at the top are in place
• Create an environment in which employees feel safe challenging management's decisions
• implement two separate sets of ethics policies, one for management and one for employees
• All of the above

Professional auditing standards suggest that auditors incorporate an 'element of predictability' in the selection of auditing procedures to be performed so that they ensure the same areas are tested in the same manner during each audit.

• True
• False