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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Sample Questions:

1. In the area of criminological theory, deterrence is the theory that tries to prevenl crime by using the threat of criminal sanctions.

A) True
B) False

2. Which of the following would MOST LIKELY be a violation of the ACFE Code of Professional Ethics?

A) 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.
B) 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.
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

3. Which of the following is TRUE regarding government auditors' responsibilities to report evidence of potential fraud uncovered during an audit of a public-sector organization's financial statements?

A) Government auditors' reporting requirements pertaining to fraud are substantially the same as those for external auditors in the private sector.
B) All government auditors maintain the same requirements for reporting evidence of potential fraud uncovered during a public-sector financial statement audit.
C) Government auditors are legally prohibited from reporting evidence of potential fraud to any parties outside the organization being audited.
D) The requirements for government auditors to report evidence of potential fraud depend on the jurisdiction and the specific audit mandate.

4. Which of the following is the BEST reason to perform fraud risk assessments periodically?

A) External audits eliminate the need for updates
B) Regulations prohibit reassessment
C) Fraud risks remain constant over time
D) Business processes, personnel, and risks change over time

5. Management at ABC Company wants to transfer one of the risks identified during the company's fraud risk assessment process. Which of the following actions would be MOST APPROPRIATE to support this response?

A) Discontinuing the underlying activity completely
B) Deciding not to implement any responsive measures
C) Implementing additional preventive and detective controls
D) Purchasing fidelity insurance to protect against the associated risk of loss

Solutions: