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Comprehensive ACFE CFE-Fraud-Prevention-and-Deterrence Exam Questions in PDF Format

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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Sample Questions (Q167-Q172):

NEW QUESTION # 167
(Cedric is an internal auditor with XYZ Company. Cedric's supervisor, James, is the chief audit executive (CAE) and the fraud risk assessment sponsor. James has tasked Cedric with drafting an email communication regarding XYZ's upcoming fraud risk assessment process. Which of the following is a best practice that Cedric should implement?)

A. Cedric should send a generic communication to the entire staff.
B. Cedric's communication should be sent from James's email address.
C. Cedric should keep the communication private and share it only with XYZ's board of directors.
D. Cedric's communication should be vague to avoid giving away specifics about the fraud risk assessment process.

Answer: B

Explanation:
The Fraud Risk Assessment chapter emphasizes the importance of educating employees and openly promoting the fraud risk assessment process. It also explains that the right sponsor is critical and that an influential leader should formally support and communicate the process. Because James is the chief audit executive and the sponsor, communications about the upcoming assessment should come from him or clearly carry his authority. Sending the message from the sponsor's email address reinforces legitimacy, organizational support, and employee attention. By contrast, keeping the communication limited to the board, making it overly generic, or intentionally vague would undermine the manual's guidance to openly promote the process and prepare the organization effectively. Thus, the best practice is for the communication to be sent from James's email address.

NEW QUESTION # 168
Which of the following is a detective anti-fraud control?

A. Separation of duties
B. Independent reconciliations
C. Hiring policies and procedures
D. Fraud awareness training

Answer: B

Explanation:
Detective Anti-Fraud Controls:
* These controls aim to identify fraud after it has occurred. Independent reconciliations are an example of such controls because they verify transactions and accounts to detect discrepancies.
Why B is Correct:
* Independent reconciliations are specifically designed to identify errors or fraud in financial records.
Why Other Options are Incorrect:
* A, C, and D: These are preventive controls designed to reduce the likelihood of fraud occurring rather than detecting it after the fact.

NEW QUESTION # 169
Which of the following is TRUE regarding International Standard on Auditing (ISA) 240?

A. ISA 240 requires auditors to effectively educate the staff about the risk of fraud within the audited organization.
B. ISA 240 creates requirements for the board of directors regarding the establishment of a holistic fraud risk management program.
C. ISA 240 provides guidance regarding the auditor's responsibility to consider fraud in an audit of financial statements.
D. ISA 240 establishes auditors as being primarily responsible for implementing anti-fraud internal controls within an organization.

Answer: C

NEW QUESTION # 170
Which of the following is TRUE regarding the G20/OECD Principles of Corporate Governance?

A. They are required to be implemented by all corporations in the jurisdictions that have officially adopted them.
B. They are intended to be applicable in emerging markets but not in developed economies.
C. They state that a corporate governance framework should promote transparent and fair markets and the efficient allocation of resources.
D. They assert that a corporate governance framework should ensure that the treatment of shareholders differs based on the class of stock they own.

Answer: C

Explanation:
Comprehensive and Detailed in Depth Explanation:
The G20/OECD Principles of Corporate Governance advocate for transparent and fair markets and the efficient allocation of resources, making Option A the correct statement. These principles are internationally recognized as a standard for policy makers, investors, corporations, and other stakeholders worldwide. The principles are intended to apply to both developed and emerging markets, not just emerging ones (rejecting Option C), and while influential, they are not legally binding mandates (rejecting Option D). They also support the equitable treatment of shareholders, regardless of share class (rejecting Option B).

NEW QUESTION # 171
Which of the following statements is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?

A. Professional skepticism involves maintaining a mindset that no fraud has occurred
B. Professional skepticism means beginning all assignments with the belief that something is amiss.
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.

Answer: D

NEW QUESTION # 172
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