CFE-Fraud-Prevention-and-Deterrence Practice Questions

A.  

Performance

B.  

Strategy and objective-setting

C.  

Governance and culture

D.  

Information, communication, and reporting

A.  

They state that a corporate governance framework should promote transparent and fair markets and the efficient allocation of resources.

B.  

They assert that a corporate governance framework should ensure that the treatment of shareholders differs based on the class of stock they own.

C.  

They are intended to be applicable in emerging markets but not in developed economies.

D.  

They are required to be implemented by all corporations in the jurisdictions that have officially adopted them.

A.  

Green a CFE, uncovered several material internal control deficiencies unrelated to the financial statement fraud he was investigating. In his final report to management. Green included information about the deficiencies even though they were unrelated to the situation he was hired to investigate.

B.  

Stephanie, a CFE, accepted a fraud examination assignment and then instructed a lower-level employee to assess the company ' s cash records for signs of fraud. She took his word when he said there was no evidence of wrongdoing and ended up failing to uncover a very costly fraud scheme.

C.  

Susan, a CFE, was hired by a client to conduct a fraud examination but found nothing amiss A year later, she received a legal order from the local prosecutor ' s office to provide the client ' s file. Susan complied with the court order, even though she did not have the client ' s authorization to do so.

D.  

All of the above are violations

A.  

Fraud examiners.

B.  

General counsel.

C.  

Human resources.

D.  

Management.

A.  

Aaron’s audit objectives are likely narrower than those of a private-sector financial statement audit.

B.  

Aaron should remain alert for fraud but does not need to consider the potential for abuse or other misconduct during the audit engagement.

C.  

Aaron likely does not have the ability to withdraw from the engagement, even if fraud is identified during the audit.

D.  

Aaron does not need to comply with the requirements found in International Standard on Auditing 240, as they do not apply to the engagement.

A.  

Emphasizing to all employees that the company maintains a policy of zero tolerance for fraud.

B.  

Keeping all known incidents of fraud private to protect the identities of parties involved.

C.  

Maintaining a policy that allows employees one warning before they are terminated for committing fraud

D.  

Punishing frauds only if they have a significant financial impact.

A.  

Employees should be made aware that management is watching for unexplained lifestyle and behavioral changes that might indicate fraudulent conduct.

B.  

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

C.  

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

D.  

Managers should be instructed that it is a violation of employee privacy rights to monitor employees for behaviors that are indicative of fraud.

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 must assign both a quantitative and qualitative measure to the company ' s risk appetite to accurately measure the program ' s effectiveness.

D.  

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

A.  

Professional skepticism means beginning all assignments with the belief that something is amiss.

B.  

Professional skepticism involves maintaining a mindset that no fraud has occurred

C.  

Fraud examiners should form the engagement hypothesis without regard to the available preliminary information.

D.  

Fraud examiners should not relax their skeptical attitudes under any circumstances.

A.  

True

B.  

False