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NEW QUESTION 27
The objective of anti-fraud controls is to:
- A. Reduce the residual fraud risk to a level that is significantly smaller than the inherent fraud risk
- B. Completely eliminate inherent fraud risk
- C. Completely eliminate residual fraud risk
- D. Reduce the inherent fraud risk to a level that is significantly smaller than the residual fraud risk.
Answer: C
NEW QUESTION 28
The existence of many specialized departments within a company generally decreases the overall risk of fraud within the organization
- A. True
- B. False
Answer: A
NEW QUESTION 29
Which of the following is NOT considered a conflict of interest that is prohibited under the ACFE Code of Professional Ethics? )
- A. Undertaking engagements for both sides in a case of an alleged product substitution scheme
- B. Accepting an assignment to assess red flags of fraud at an organization in which the fraud examiner is a partner, provided the fraud examiner's ownership interest is disclosed
- C. Undertaking an engagement that decreases the fraud examiner's ability to perform their duties for their full-time employer
- D. Accepting an assignment to secretly infiltrate the fraud examiner s employing organization and transmit inside information to another party
Answer: A
NEW QUESTION 30
Criminologist Charles McCaghy has slated that profit pressure is the single most compelling factor behind deviance by organizations
- A. True
- B. False
Answer: A
NEW QUESTION 31
Employee anti-fraud education should:
- A. Be presented by organizational executives or anti-fraud professionals only
- B. Include examples of prior employee misconduct and how those situations were handled
- C. Include descriptions of the procedures that management uses to detect fraud.
- D. Be restricted to formal educational mechanisms to reinforce the importance of the message
Answer: B
NEW QUESTION 32
Article II of the ACFE Code of Professional Ethics prohibits illegal or unethical conduct, but it allows exceptions for unknowing violations of the law
- A. False
- B. True
Answer: A
NEW QUESTION 33
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 well-defined job descriptions to facilitate performance evaluations
- C. Evaluating employee performance based solely on productivity and profit
- D. Providing regular training to ensure that all employees are sufficiently prepared to perform their tasks
Answer: C
NEW QUESTION 34
Which of the following is NOT a purpose served by a professional organization s code of conduct?
- A. It facilitates practical enforcement and profession-wide internal discipline
- B. It provides more direct solutions to professional ethical dilemmas than might exist under general ethical principles
- C. It serves as a reference and benchmark for ethical guidance
- D. It provides clear answers to all ethical dilemmas the organization s members might face
Answer: C
NEW QUESTION 35
Which of the following theories suggests that, when considering the possibility of violating a law. people are likely to ask themselves. "What would my family and friends think if they find out?
- A. Cognitive theory
- B. Social control theory
- C. Behavioral theory
- D. Routine activities theory
Answer: B
NEW QUESTION 36
Independent auditors play a critical role in enhancing the reliability of financial information by financial position and performance in compliance with accepted accounting standards.
- A. True
- B. False
Answer: A
NEW QUESTION 37
Which of the following is FALSE regarding proactive fraud auditing procedures?
- A. Analytical review of the financial statements is best used to uncover small frauds that might be missed by other detection methods
- B. Implementing proactive fraud audit procedures demonstrates management's intention to aggressively seek out possible fraudulent conduct
- C. Fraud assessment questioning techniques are most appropriately used as part of the normal audit process
- D. Fraud audit procedures should be designed to incorporate an element of surprise.
Answer: A
NEW QUESTION 38
Which of the following is among the audit committee s primary responsibilities related to fraud risk management?
- A. Designing the fraud risk management program
- B. Implementing the fraud risk management program
- C. Punishing fraud perpetrators discovered through fraud risk management activities
- D. Understanding how internal and external audit strategies address fraud risk
Answer: A
NEW QUESTION 39
Which of the following is TRUE regarding the reporting of the fraud risk assessment results7
- A. All of the above
- B. The fraud risk assessment report should be delivered in a style most suited to the language of the business
- C. The fraud risk assessment report should contain a detailed, comprehensive list of every assessment finding
- D. A fraud risk assessment report should reflect the assessment team's subjective perspective regarding the risks identified
Answer: A
NEW QUESTION 40
Employees should be kepi unaware that management is watching for lifestyle and behavior changes in staff members that might indicate fraud
- A. True
- B. False
Answer: A
NEW QUESTION 41
As part of her audit of ABC Corp . Rachel, a CPA. is identifying the risks of material misstatement due to fraud As part of this task, she should evaluate any unexpected relationships that she identified in performing analytical procedures.
- A. True
- B. False
Answer: A
NEW QUESTION 42
An effective system of internal controls:
- A. Decreases the perception that fraud will be detected
- B. Focuses more on detective controls than preventive controls
- C. Focuses more on preventive controls than detective controls
- D. Does not completely eliminate the risk of fraud
Answer: C
NEW QUESTION 43
Glenda. an internal auditor, and Bridgette. an accounts receivable clerk, have had several heated disagreements over accounting procedures and policies Glenda has just been told that she will be the lead on the company s fraud risk assessment. During the fraud risk assessment. Glenda should:
- A. Include her disagreements with Bridgette as a factor when assessing the risk of fraud in the accounts receivable department
- B. Have someone else perform the fraud risk assessment work related to the accounts receivable departments activities
- C. Confront Bridgette about the disagreements and discuss how they increase the departments risk of fraud
- D. Automatically designate the accounts receivable department as a high-risk area
Answer: C
NEW QUESTION 44
Which of the following is FALSE regarding fraud examiners responsibilities under the ACFE Code of Professional Ethics?
- A. Confidential information provided to fraud examiners by their clients is considered privileged and therefore legally exempt from disclosure in all circumstances
- B. If fraud examiners become aware of a situation that might appear to others as though they have a conflict of interest they should immediately disclose the situation to company management
- C. Fraud examiners must obtain and document evidence in a manner that ensures that the chain of custody is preserved
- D. In determining what information to include in a fraud examination report, fraud examiners should try to decide what users will consider important and material
Answer: D
NEW QUESTION 45
Which of the following statements regarding document retention policies (DRPs) is TRUE?
- A. When establishing a document retention policy, management should consider any industry-specific rules for documenting and regaining records
- B. All of the above
- C. Document retention policies do not need to include protocols for preserving electronic documents as most IT systems automatically preserve copies of such data
- D. An effective document retention policy permits the organization to continue the destruction of documents when faced with potential litigation
Answer: B
NEW QUESTION 46
Which of the following is FALSE regarding the fraud risk assessment team?
- A. The team should consist of individuals with diverse knowledge, skills, and perspectives.
- B. The team members should have experience in gathering and eliciting information
- C. The team members might include both internal and external sources
- D. The team size should be limited to a maximum of three individuals.
Answer: D
NEW QUESTION 47
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