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ACFE CFE-Fraud-Prevention Exam Syllabus Topics:

Section	Weight	Objectives
Fraud Prevention and Deterrence	25%	- Fraud deterrence strategies and controls - Internal control systems and evaluation - Fraud risk governance and organizational culture - Fraud prevention programs and frameworks - Whistleblowing and reporting mechanisms - Fraud risk assessment - Monitoring, auditing, and continuous improvement - Anti-fraud policies and procedures - Ethics and corporate governance

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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Sample Questions (Q136-Q141):

NEW QUESTION # 136
Which of the following is NOT an effective way to help prevent fraud through the organization's performance measurement and management programs?

A. Tying employee compensation to reasonable organizational performance goals
B. Establishing loosely defined job descriptions that allow employees flexibility in their roles
C. Providing regular training to ensure that all employees are sufficiently prepared to perform their tasks
D. Including ethics-based metrics as a component of performance evaluations

Answer: C

Explanation:
Fraud Prevention Through Performance Management:Performance measurement and management programs can play a role in preventing fraud by ensuring accountability, setting ethical expectations, and reinforcing organizational goals.

NEW QUESTION # 137
Which of the following is NOT a responsibility of the organization's board of directors?

A. Assessing the strategy and underlying purpose of management's decisions and actions
B. Directing employees to execute business activities
C. Serving as the intermediaries between shareholders and management
D. Acting as guardians of the organization's resources and assets

Answer: B

Explanation:
Responsibilities of the Board of Directors:
The board is primarily responsible for oversight, governance, and ensuring the organization operates in the best interest of stakeholders. Key responsibilities include:
Acting as intermediaries between shareholders and management.
Safeguarding resources and assets.
Assessing management's strategies and decisions.
Why C is Correct:
Directing employees is a management responsibility, not a board function. The board focuses on oversight rather than operational execution.

NEW QUESTION # 138
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 not relax their skeptical attitudes under any circumstances.
D. Fraud examiners should form the engagement hypothesis without regard to the available preliminary information.

Answer: C

Explanation:
Professional Skepticism Defined:
Professional skepticism is an attitude that includes a questioning mind and a critical assessment of evidence. Fraud examiners must remain vigilant to indications of potential fraud throughout an engagement.
Consistent Application:
ACFE standards emphasize that skepticism should be applied consistently, even if initial findings do not indicate fraud, to avoid overlooking potential risks.
Why D is Correct:
Relaxing skepticism can lead to missed evidence or poor judgment, undermining the examination's effectiveness.

NEW QUESTION # 139
Which of the following is a TRUE statement regarding fraud risks?

A. Residual risks are risks that are present before the effect of internal controls.
B. The objective of anti-fraud controls is to reduce the residual fraud risk to a level that is significantly lower than the inherent fraud risk.
C. The objective of anti-fraud controls is to completely eliminate the inherent fraud risk.
D. Inherent risks are risks that remain after efforts are made to mitigate fraud risk.

Answer: B

NEW QUESTION # 140
Susannah Is conducting an external audit of a company In a jurisdiction that is subject to International Standards on Auditing (ISAs). While undertaking her audit procedures, she discovers evidence that senior management has been fraudulently manipulating the financial statements. Which of the following is Susannah's BEST response to these findings?

A. Susannah should report her findings to the audit committee of the board of directors.
B. Susannah should Immediately report her findings to the secunties regulators
C. Susannah should not disclose her findings to any other parties due to client confidentiality.
D. Susannah should confront management with her audit findings and try to get a confession.

Answer: A

Explanation:
Fraud Discovered During an Audit:
Under ISAs, auditors must communicate findings of fraud to the appropriate governance body, such as the audit committee or board of directors.
This ensures accountability and allows the organization to take appropriate remedial action.

NEW QUESTION # 141
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