CFE-Fraud-Prevention-and-Deterrence Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Question and Answers

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

Reporting to regulators regarding the entity's vulnerability to fraud

Overseeing management's actions to manage fraud risks

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

Trustworthiness

A well-developed sense of moral philosophy

Avoidance of conflicts of interest

Refusal to admit errors

Internal auditors

The compliance function

Management

External auditors

Asset misappropriation; corruption

Corruption, asset misappropriation

Financial statement fraud: corruption

Asset misappropriation: financial statement fraud

High personal debt; lack of separation of duties

Revenge: too much trust in key employees

Living beyond their means, too much trust in key employees

Desire for recognition, lack of separation of duties

Fully eliminates the risk of fraud

Focuses more on detective controls than preventive controls

Focuses more on preventive controls than detective controls

Increases the perception that fraud will be detected

True

False

Demote employees who do not adhere to the expected processes.

Publicly call out and criticize employees who deviate from the formal processes.

Offer a bonus to anyone who experiences no process exceptions for ninety days-

Take away a day of paid time off for each process exception.

Positive reinforcement

Negative reinforcement

Punishment

None of the above

Susannah should confront management with her audit findings and try to get a confession.

Susannah should Immediately report her findings to the secunties regulators

Susannah should report her findings to the audit committee of the board of directors.

Susannah should not disclose her findings to any other parties due to client confidentiality.

The fraud risk assessment report should be delivered in a style most suited to the language of the business

The fraud risk assessment report should contain a detailed, comprehensive list of every assessment finding

A fraud risk assessment report should reflect the assessment team's subjective perspective regarding the risks identified

All of the above

XYZ must comply with the various laws and regulations in the countries in which it operates

XYZ is subject to the Universal Corporate Governance Act because it is a publicly traded corporation.

XYZ is required to comply with G20'OECD Principles of Corporate Governance.

XYZ is not required to comply with any corporate governance requirements because it operates in multiple jurisdictions

Blue should consider Green's expected purchasing pattern and method of payment in determining whether to accept the transaction.

Blue only needs to undertake due diligence procedures if Green is requesting to pay on credit.

Blue should perform the same level of due diligence as it would for any other customer to avoid claims of discrimination.

Blue does not need to undertake any specific due diligence procedures for this transaction.

Operational risk assessment

Internal control

Fraud risk management

Financial reporting

Positive reinforcement

Negative reinforcement

Punishment

None of the above

The company should communicate that fraud, waste, and abuse are more likely to occur in large organizations than small ones.

The company should require employees with information about potential fraud to report it directly and only to their immediate supervisor.

Employees are held accountable for reporting tips that are not able to be substantiated

Employees should be informed that, to the extent possible, their names will not be disclosed.

Rodrigo. a CFE. uncovered several material Internal control deficiencies unrelated to the Kickback scheme he was Investigating. In his final report to management. Rodrigo included information about the deficiencies even though they were unrelated to the situation he was hired to investigate.

Vivian, a CFE, accepted an assignment to conduct a fraud examination within a manufacturing company. Because she was in a hurry to complete the investigation, she overlooked key items of evidence and ended up failing to uncover a major fraud scheme.

Tom, a CFE, was hired by a client to conduct a fraud examination but found nothing amiss. A year later, he received a court order to provide the client's file to the ordering court. Tom complied with the court order, even though he did not have the client's authorization to do so.

All of the above are violations.

Interviews

Focus groups

Anonymous feedback mechanisms

Surveys