CFE-Fraud-Prevention-and-Deterrence Practice Questions

A.  

Rewards are given to employees who challenge the status quo

B.  

Management encourages employee loyalty through social functions

C.  

Management separates employee performance goals from company performance goals

D.  

All of the above

A.  

Operational risk assessment

B.  

Internal control

C.  

Fraud risk management

D.  

Financial reporting

A.  

ISA 240 requires auditors to effectively raise awareness about the risk of fraud within the audited organization.

B.  

ISA 240 establishes standards regarding the auditor ' s responsibility to consider fraud in an audit of financial statements.

C.  

ISA 240 establishes auditors as being primarily responsible for the prevention and detection of fraud within an organization.

D.  

ISA 240 creates requirements for management regarding the establishment of a holistic fraud risk management program.

A.  

The company should communicate that fraud, waste, and abuse are more likely to occur in large organizations than small ones.

B.  

The company should require employees with information about potential fraud to report it directly and only to their immediate supervisor.

C.  

Employees are held accountable for reporting tips that are not able to be substantiated

D.  

Employees should be informed that, to the extent possible, their names will not be disclosed.

A.  

It functions as a reference and benchmark for ethical guidance.

B.  

It offers fewer and less direct solutions to professional ethical dilemmas than might exist under general ethical principles.

C.  

It acts as a substitute for legal and regulatory requirements that apply to the profession.

D.  

It replaces the need for individuals to consult their own principles.

A.  

Analytical review of BKY ' s financial statements is the best way to uncover small frauds that might be missed by other detection methods.

B.  

Fraud audit procedures should be designed to avoid an element of surprise.

C.  

Auditors should avoid asking questions such as, " Has anyone ever asked you to do something unethical? " as part of their audits, as this can limit employees ' willingness to communicate.

D.  

Fraud assessment questioning techniques are most effectively used as part of the normal audit process.

A.  

Fraud risk governance

B.  

Fraud control activities

C.  

Fraud risk management monitoring activities

D.  

Fraud investigation and corrective action

A.  

Withdrawal of financial institution funding

B.  

Strong intervention of the government

C.  

Consumer action to force change

D.  

Voluntary changes in corporate attitudes and structure

A.  

General counsel

B.  

Human resources

C.  

Management

D.  

Fraud examiners

A.  

Provide adequate resources and authority to the internal audit function.

B.  

Have a mandatory independent finance committee.

C.  

Assign oversight of the hotline reporting program to company shareholders.

D.  

Develop a written charter for the audit committee.