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CFE-Fraud-Prevention-and-Deterrence Practice Questions

Certified Fraud Examiner - Fraud Prevention and Deterrence Exam

Last Update 4 days ago
Total Questions : 330

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Question # 11

(Management at XYZ Inc. wants to mitigate one of the risks identified during the company’s fraud risk assessment process. Which of the following actions would be MOST APPROPRIATE to support this response?)

Options:

A.  

Discontinuing the underlying activity completely

B.  

Deciding not to implement any responsive measures

C.  

Purchasing fidelity insurance to protect against the associated risk of loss

D.  

Implementing additional internal control measures

Discussion 0
Question # 12

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?

Options:

A.  

Baldwin asking for guidance from his family and friends.

B.  

Baldwin reviewing the ACFE Code of Professional Ethics.

C.  

Baldwin contemplating philosophical principles related to ethics.

D.  

Baldwin reading the applicable contract law.

Discussion 0
Question # 13

Employees should be kept unaware that management is watching for lifestyle and behavior changes In staff members that might indicate fraud.

Options:

A.  

True

B.  

False

Discussion 0
Question # 14

Which of the following scenarios is a representation of organizational crime?

Options:

A.  

A senior accountant uses company funds to pay for personal credit card charges.

B.  

A retail manager works with a friend to commit a scheme involving fraudulent product returns.

C.  

An inventory manager takes home the company’s products to sell privately.

D.  

A commercial director agrees with other businesses in the same industry to raise prices.

Discussion 0
Question # 15

Stevens, a Certified Fraud Examiner (CFE), was hired to conduct a fraud examination at ABC Company. His examination did not reveal any conclusive evidence that fraud had occurred orwas occurring. Consequently, ABC ' s management asked Stevens to state in his official examination report that the organization is free of fraud as a means of assuring the board of directors that the company ' s anti-fraud controls were effective. Under the ACFE Code of Professional Ethics. Stevens is permitted to comply with management ' s request based on the findings of his examination.

Options:

A.  

True

B.  

False

Discussion 0
Question # 16

During an external audit of an organization ' s financial statements, Saskia, the external auditor, uncoverssignificant internal control deficiencies at the organization. She believes these deficiencies could result in a material misstatement of the financial statements. Which of the following should Saskia do regarding these findings?

Options:

A.  

Saskia should provide a written communication about her findings to the relevant regulatory agencies.

B.  

Saskia should suspend the current audit engagement and begin a new audit focused on the internal control deficiencies.

C.  

Saskia should communicate the deficiencies in writing to those charged with governance.

D.  

Saskia should withdraw from the audit engagement immediately and issue a disclaimer on any prior work performed.

Discussion 0
Question # 17

Rosie, a Certified Fraud Examiner (CFE), conducted a fraud examination for her company that led to a confession of guilt from Dean. Which of the following statements in Rosie ' s verbal report to management would violate the ACFE Code of Professional Ethics?

Options:

A.  

" The evidence does not support Dean ' s confession. "

B.  

" Dean is guilty of embezzlement. "

C.  

" Dean ' s confession is supported by the evidence. "

D.  

" Dean confessed to embezzlement. "

Discussion 0
Question # 18

According to the differential reinforcement theory, behavior is weakened when positive rewards are gained or punishment is avoided.

Options:

A.  

True

B.  

False

Discussion 0
Question # 19

During an external audit of an organization ' s financial statements. Elena, the external auditor, uncovers significant internal control deficiencies at the audit client ' s organization. She believes these deficiencies could result in a material misstatement of the financial statements. Which of the following should Elena do with regard to these findings?

Options:

A.  

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

B.  

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

C.  

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

D.  

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

Discussion 0
Question # 20

Which of the following statements is FALSE regarding an organization ' s fraud risk management program?

Options:

A.  

The program must include mechanisms to monitor and identify breaches in compliance.

B.  

The responsibility of handling suspected incidents of noncompliance should be delegated to someone outside of the company.

C.  

Formal sanctions for intentional noncompliance should be well-publicized throughout the company

D.  

There should be measures in place to address failures in the design or operation of anti-fraud controls, as well as fraud occurrences

Discussion 0
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