CFE-FRAUD-PREVENTION-AND-DETERRENCE Online Practice Questions and Answers

Which of the following is NOT included in G20/OECD Principles of Corporate Governance (the Principles)?

A. A request that governments have in place an appropriate framework to support good corporate governance practices

B. Recognition of the importance of the role of stakeholders in corporate governance

C. Support for establishing stronger protection for foreign shareholders than for domestic shareholders

D. Guidance regarding appropriate board structures, responsibilities, and procedures

Which of the following is FALSE regarding corporate governance'

A. Effective corporate governance practices are most necessary in an organization in which the owners are not also the individuals responsible for setting and executing the business strategy

B. Effective corporate governance practices are considered to be the foundation of fraud risk management.

C. Corporate governances primary purpose is to ensure the accuracy of the organization's financial reports

D. An entity's corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organization.

The objectives of a fraud risk management program include

A. Proactively identifying fraud risks

B. Limiting the damage caused by fraud occurrences

C. Punishing fraud perpetrators

D. All of the above

The International Organization of Securities Commissions' (IOSCO) Principles for Auditor Oversight states that auditor oversight should involve a regular review process designed to ascertain whether audit firms adhere to quality control policies and procedures.

A. True

B. False

The internal auditor s fraud-related responsibilities include which of the following?

A. Evaluating whether management is actively retaining responsibility for oversight of the fraud risk management program

B. Attesting that the organization s financial statements are free of material misstatements caused by fraud

C. Reporting to regulators regarding the entity's vulnerability to fraud

D. Overseeing managements actions to manage fraud risks

The generation and use of relevant, quality information to support the functioning of internal control is a principle related to which component of the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) Internal Control--Integrated Framework (the Framework)?

A. Risk assessment

B. Control environment

C. Monitoring

D. Information and communication

Which of the following would most likely be a violation of the ACFE Code of Professional Ethics?

A. 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

B. 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.

C. 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.

D. All of the above are violations

In the area of criminological theory, compliance is the theory that tries to prevent crime by providing economic incentives for voluntary conformity to the laws and using administrative efforts to control violations before they occur.

A. True

B. False

According to International Auditing Standard (ISA) 240. the two types of intentional financial statement misstatements that are relevant to the auditor are

A. Misstatements resulting from fraudulent financial reporting and misstatements resulting from misappropriation of assets

B. Misstatements resulting from revenue manipulation and misstatements resulting from expense manipulation

C. Misstatements affecting the income statement and misstatements affecting the balance sheet

D. Immaterial misstatements and material misstatements

Criminologist Charles McCaghy has slated that profit pressure is the single most compelling factor behind deviance by organizations

A. True

B. False