ACFE

CFE-Fraud-Prevention-and-Deterre

Certified Fraud
Examiner - Fraud
Prevention and
Deterrence Exam
Version: Demo
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[ Total Questions: 10]
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Practice Test ACFE - CFE-Fraud-Prevention-and-Deterrence

Question #:1

According to the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal
Control-integrated Framework (the Framework), there are five interrelated components of a company's internal
control. Which of the following is NOT among these five components?

A. Monitoring

B. Control environment

C. Independent oversight

D. Information and communication

Answer: C

Question #:2

Which of the following is an example of organizational crime?

A. A sales manager using a corporate credit card for personal expenses

B. Management of several pharmaceutical companies engaging in a price fixing scheme

C. An insurance claims agent conspiring with customers to file false insurance claims and share the
proceeds

D. An HR employee adding a ghost employee to the payroll and misappropriating the paychecks

Answer: B

Question #:3

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 assume that all audit evidence collected previously is unreliable and withdraw from
the audit engagement

B. The auditors should assess the need to adjust the nature, timing, and extent of remaining audit
procedures based on this evidence.

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 do not need to be concerned with this evidence, as asset misappropriation schemes are not

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Practice Test ACFE - CFE-Fraud-Prevention-and-Deterrence
D.

considered relevant or material for external audit purposes.

Answer: C

Question #:4

Which of the following Is FALSE regarding a fraud risk assessment?

A. The assessment team should consider how employees behave as part of Its assessment

B. The assessment should be used to improve employee fraud awareness.

C. The designation of an area as being high risk does not conclusively mean that fraud is occurring there.

D. The objective of the assessment is to provide an estimate of the organization's fraud losses.

Answer: D

Question #:5

Which of the following statements Is TRUE regarding how fraud examiners should exercise professional
skepticism during a fraud examination engagement?

A. Fraud examiners should not relax their skeptical attitudes under any circumstances.

B. Professional skepticism involves maintaining a mindset that no fraud has occurred

C. Fraud examiners should form the engagement hypothesis without regard to the nature of the assignment

D. Professional skepticism can be dispelled only by evidence

Answer: D

Question #:6

According to the results of behavioral studies, such as those conducted by B. F. Skinner, application of
punishment to undesired behavior typically results in which of the following?

A. increase in the occurrence of the undesired behavior

B. No effect on the occurrence of the undesired behavior

C. Temporary suppression of the undesired behavior

D. Permanent suppression of the undesired behavior

Answer: C

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Practice Test ACFE - CFE-Fraud-Prevention-and-Deterrence

Question #:7

Which of the following statements regarding best practices that organizations can take to protect and support
whistleblowers is MOST ACCURATE?

A. Organizations should emphasize that rules regarding whistleblower protections are only intended for
lower level employees who might be more vulnerable to retaliation.

B. Organizations should implement a clear whistleblower policy that lists out every type of misconduct that
has ever been reported at the company.

C. Organizations should publicize their whistleblower procedures internally but should avoid
communicating any procedural information to parties outside of the organization.

D. Organizations should establish formal consequences that are to be imposed upon employees at the
company who retaliate against a whistleblower.

Answer: D

Question #:8

Fraud risks related to regulatory and legal misconduct include all of the following EXCEPT:

A. Fraudulent customer payments

B. Anti-competitive practices

C. Insider trading

D. Conflicts of interest

Answer: D
Question #:9

During the course of a fraud examination. While, an employee of the ABC Corp.. approaches Blue, a Certified
Fraud Examiner (CFE), and tells Blue that she wishes to furnish information in confidence. Blue also is
employed by the ABC Corp. Blue should:

A. Tell White that she will try to keep the information as confidential as possible

B. Agree that the information will be held in confidence, even though Blue knows it will not be

C. Take White's request straight to ABC Corp.'s management

D. Not agree to the request for confidentiality

Answer: D

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Practice Test ACFE - CFE-Fraud-Prevention-and-Deterrence

Question #:10

Employee support programs are a fraud prevention mechanism that addresses which leg of the Fraud Triangle

A. Rationalization

B. Lack of integrity

C. Opportunity

D. Pressure

Answer: A

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