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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Sample Questions:

1. Alicia, a government auditor, is conducting a financial statement audit of a public-sector entity in accordance with the International Standards of Supreme Audit Institutions. Which of the following is TRUE regarding Alicia's consideration of fraud during this engagement?

A) Alicia must comply with the requirements found in International Standard on Auditing 240 as they apply to both private- and public-sector audits.
B) If Alicia identifies fraud during the audit engagement, she must immediately withdraw from the engagement.
C) In conducting the audit, Alicia's objectives are likely narrower than those of a private-sector financial statement audit.
D) Alicia should focus on potential fraud and does not need to consider the possibility of abuse or other misconduct during the audit engagement.

2. Devon, an employee at Tilly Corp., repeatedly demonstrates a negative attitude when working with other departments. To address this behavior, Devon's manager tells him that he is no longer allowed to lead cross-departmental projects. This is an example of what type of behavioral response?

A) Punishment
B) Positive reinforcement
C) None of the above
D) Negative reinforcement

3. 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.

4. Baldwin, a Certified Fraud Examiner (CFE), has an ethical dilemma regarding his business contract with his professional partners. Which of the following scenarios demonstrates Baldwin consulting a source of guidance that would be considered the LOWEST level of reference to use for determining the most ethical action to take?

A) Baldwin asking for guidance from his family and friends.
B) Baldwin reading the applicable contract law.
C) Baldwin reviewing the ACFE Code of Professional Ethics.
D) Baldwin contemplating philosophical principles related to ethics.

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

Solutions: