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| Section | Weight | Objectives |
|---|
| Fraud Prevention Framework | 25% | - Fraud risk governance and oversight - Fraud risk assessment processes
|
| Internal Controls and Fraud Prevention | 25% | - Internal control design and effectiveness - Fraud detection and prevention controls
|
| Corporate Governance and Ethics | 25% | - Ethical culture and tone at the top - Code of conduct and compliance programs
|
| Fraud Risk Management and Deterrence | 25% | - Monitoring and continuous improvement - Fraud prevention strategies and programs
|
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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Sample Questions (Q90-Q95):
NEW QUESTION # 90
Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?
- A. Management must assign a quantitative measure to its risk appetite so that it can accurately measure the fraud risk management program's effectiveness.
- B. Management should tailor the detailed objectives of the fraud risk management program to the organization's specific needs and goals.
- C. Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented tnem.
- D. Management must balance the investment in anti-fraud controls with the benefit of those controls and the amount of risk it is willing to accept.
Answer: A
Explanation:
Management should focus on tailoring objectives to the organization's needs, examining past fraud incidents, and balancing costs with benefits. Assigning a quantitative measure to risk appetite, while potentially useful, is not a requirement for effective fraud risk management.
NEW QUESTION # 91
Professional auditing standards require that auditors incorporate an "element of unpredictability" in the selection of auditing procedures to be performed.
Answer: A
Explanation:
Professional Auditing Standards Requirement:
Standards such as the International Standards on Auditing (ISA) and Generally Accepted Auditing Standards (GAAS) require auditors to include elements of unpredictability in their audit procedures to reduce the risk of fraud.
Purpose of Unpredictability:
By varying the scope, timing, and extent of audits, auditors prevent potential fraudsters from anticipating audit procedures and adjusting their behavior.
Why A is Correct:
This aligns with established auditing principles to enhance fraud detection and maintain audit integrity.
NEW QUESTION # 92
In the context of a fraud examination, integrity requires which of the following?
- A. The ability to conceal errors to preserve the reliability of the work performed
- B. A well-developed sense of moral philosophy and the ability to distinguish right from wrong
- C. Prioritization of desires for personal gain over the interests of clients
- D. Avoidance of differences of opinion on all material matters
Answer: B
NEW QUESTION # 93
Alicia, a government auditor, is conducting a financial statement audit of a public-sector entity in accordance with the International Standards of Supreme Audit Institutions. Which of the following is TRUE regarding Alicia's consideration of fraud during this engagement?
- A. If Alicia identifies fraud during the audit engagement, she must immediately withdraw from the engagement.
- B. Alicia should focus on potential fraud and does not need to consider the possibility of abuse or other misconduct during the audit engagement.
- C. In conducting the audit, Alicia's objectives are likely narrower than those of a private-sector financial statement audit.
- D. Alicia must comply with the requirements found in International Standard on Auditing 240 as they apply to both private- and public-sector audits.
Answer: D
Explanation:
Government auditors, like their private-sector counterparts, must adhere to International Standard on Auditing (ISA) 240, which provides guidance on the auditor's responsibilities related to fraud.
This standard applies to both private- and public-sector audits, emphasizing the importance of addressing risks of material misstatement due to fraud. Alicia must carefully evaluate fraud risks and incorporate relevant procedures, as mandated by ISA 240, ensuring a comprehensive audit approach.
NEW QUESTION # 94
Joanna is leading the fraud risk assessment process for her organization. Which of the following considerations about the fraud risk assessment process is MOST ACCURATE and should be incorporated into Joanna's plans?
- A. If the individuals conducting the fraud risk assessment believe that fraud could not happen within the organization, then the assessment process should reflect that belief.
- B. The fraud risk assessment can be conducted effectively by people inside or outside of the organization.
- C. The fraud risk assessment is most effective when management's influence on the process is limited.
- D. To ensure the independence of the team members, a consultant or another external party must conduct the fraud risk assessment.
Answer: B
Explanation:
Fraud risk assessments can be effectively conducted by internal personnel or external consultants. The key is that they must be conducted objectively and with due professional care.
There is no requirement that they be conducted only externally (eliminating A), nor should biases about the improbability of fraud influence the assessment scope (eliminating B). Management involvement can be helpful when balanced appropriately--it should not be unduly limited (eliminating D).
NEW QUESTION # 95
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