CFE-Fraud-Prevention-and-Deterrence Practice Questions

A.  

Team members should all have similar skills and perspectives.

B.  

The size of the team should be limited to four individuals.

C.  

The team should include only external sources.

D.  

Team members should have experience in eliciting information.

A.  

Accepting assignments with disclosed conflicts of interest.

B.  

Giving opinions regarding technical matters.

C.  

Participating in conduct that could be considered unethical.

D.  

Providing conclusions based on evidence.

A.  

The damage caused by corporate violations involving large sums of money is limited to the industry leaders who can afford the loss.

B.  

Violations are caused by economic necessity and protect employees from losing their jobs.

C.  

Government regulations are justified because the additional costs of regulations and bureaucratic procedures increase government profits.

D.  

Compliance with government regulations does not offer benefits to the public.

A.  

When verifying past employment, management should only ask previous employers to verify the candidate ' s previous position and dates of employment.

B.  

If a background check was conducted on an employee at the time of hire, then there is no need for management to conduct additional background checks on that employee during their employment.

C.  

As part of the screening process, management should contact the personal and professional references provided by the job candidate only if they are unsure whether the candidate is being honest.

D.  

Management should perform a background check on any candidate who will have access to cash, checks, credit card numbers, or other items that are easily stolen.

A.  

Rationalization

B.  

Perceived opportunity

C.  

Perceived acquiescence

D.  

Perceived non-shareable financial need

A.  

Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented tnem.

B.  

Management must balance the investment in anti-fraud controls with the benefit of those controls and the amount of risk it is willing to accept.

C.  

Management must assign a quantitative measure to its risk appetite so that it can accurately measure the fraud risk management program’s effectiveness.

D.  

Management should tailor the detailed objectives of the fraud risk management program to the organization ' s specific needs and goals.

A.  

The auditors do not need to act on this evidence because asset misappropriation schemes are not considered relevant or material for external audit purposes.

B.  

The auditors can disregard the misstatement because the amount involved is less than the quantitative materiality threshold, which makes it immaterial to the audit.

C.  

The auditors should lower the quantitative materiality threshold applied to the entire audit because all fraud is considered quantitatively material.

D.  

The auditors should determine who manipulated the financial statements as part of assessing whether the misstatement is qualitatively material.

A.  

Differential association theory

B.  

Routine activities theory

C.  

Justification of action theory

D.  

Rational choice theory

A.  

Employees who steal do not commonly display lifestyle or behavioral warning signs of their misdeeds.

B.  

An increase in employee wealth is always a sign of fraud that should be investigated.

C.  

Managers should only observe employees for signs of suspicious behavioral or lifestyle changes if they can do so without the employees ' knowledge.

D.  

Managers should be instructed to observe employees for any unusual lifestyle improvements, such as an unexplained increase in luxury purchases.

A.  

Trustworthiness

B.  

A well-developed sense of moral philosophy

C.  

Avoidance of conflicts of interest

D.  

Refusal to admit errors