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

1. Which organizational factor is MOST likely to undermine an anti-fraud culture?

A) Ethical leadership behavior
B) Consistent enforcement of policies
C) Tolerance of policy violations by high-performing employees
D) Anonymous reporting mechanisms

2. In the context of a fraud examination, integrity requires which of the following:

A) Avoidance of differences of opinion on all material matters
B) Independence of mental attitude and avoidance of conflicts of interest
C) Ability to conceal errors to preserve the reliability of the work performed
D) Prioritization of desires for personal gain over the interests of clients

3. At the end of an engagement, a Certified Fraud Examiner (CFE) might provide a report to their client about the information uncovered during the investigation. Which of the following statements is TRUE regarding the potential privilege that applies to this report?

A) A fraud examiner's report is considered privileged information and is therefore protected from being legally demanded by outside parties.
B) A fraud examiner's report is only privileged from disclosure if the author is also a professional legal advisor.
C) A fraud examiner's report may be privileged from disclosure in certain circumstances, but it does not have an absolute legal privilege.
D) A fraud examiner's report is privileged from disclosure by anyone other than the client.

4. According to the Committee of Sponsoring Organizations of the Treadway Commission (COSO).________Is "a process. effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance."

A) Operational risk assessment
B) Financial reporting
C) Internal control
D) Fraud risk management

5. During an external audit, the audit team identifies evidence that management has intentionally omitted some expenses from the company's financial statements in order to conceal an asset misappropriation scheme. However, the amount of the resulting misstatement does not meet the quantitative materiality threshold for the audit. Which of the following is TRUE regarding this situation?

A) The auditors should assess the need to adjust the nature, timing, and extent of remaining audit procedures based on this evidence.
B) The auditors do not need to be concerned with this evidence, as asset misappropriation schemes are not considered relevant or material for external audit purposes.
C) The auditors can ignore the misstatement because the omitted amount is less than the quantitative materiality threshold and therefore immaterial to the audit.
D) The auditors should assume that all audit evidence collected previously is unreliable and withdraw from the audit engagement

Solutions: