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Certification CFE-Fraud-Prevention-and-Deterrence Sample Questions, CFE-Fraud-Prevention-and-Deterrence Pass Leader Dumps

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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Sample Questions (Q182-Q187):

NEW QUESTION # 182
In identifying the inherent fraud risks that could apply to the organization, the fraud risk assessment team should discuss:

A. Risks to the organization's reputation
B. All of the above
C. The organization's incentive programs
D. The possibility of management's override of controls

Answer: B

NEW QUESTION # 183
According to Silk and Vogel's research, business leaders rationalize legal violations by asserting that the damage done by the violations is diffused among a large number of parties.

A. True
B. False

Answer: A

NEW QUESTION # 184
In response to a risk identified during a fraud risk assessment, management decides to purchase fidelity insurance to help protect the company against the associated risk of loss This response is known as:

A. Avoiding the risk
B. Mitigating the risk
C. Assuming the risk
D. Transferring the risk

Answer: D

NEW QUESTION # 185
Patrick is conducting an external audit of a company in a jurisdiction that is subject to International Standards on Auditing (ISAs). While undertaking his audit procedures, he discovers evidence that senior management has been fraudulently manipulating the financial statements. Which of the following is Patrick's BEST response to these findings?

A. Patrick should not disclose his findings to any other parties due to client confidentiality
B. Patrick should report his findings to those charged with governance of the organization.
C. Patrick should confront management with his audit findings and try to get a confession.
D. Patrick should immediately report his findings to local law enforcement authorities.

Answer: B

Explanation:
* International Standards on Auditing (ISAs) Requirements:
* ISAs require auditors to communicate suspected or confirmed fraud to "those charged with governance" of the organization, as they have the responsibility for oversight.
* ISA 240, "The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements," mandates that findings be reported to appropriate governance bodies before considering further actions.
* Confidentiality and Legal Obligations:
* Auditors must maintain confidentiality unless legal or regulatory frameworks require disclosure to authorities. Immediate reporting to law enforcement (option B) may breach confidentiality without proper internal escalation.
* Why Option D is Correct:
* Reporting to governance ensures proper internal actions are taken and protects the integrity of the audit process. It allows the organization to address the issue before external involvement if required.
References:
* ISA 240 and the ACFE guidelines on professional auditor conduct.

NEW QUESTION # 186
Employees should be kept unaware that management is watching for lifestyle and behavior changes In staff members that might indicate fraud.

A. False
B. True

Answer: A

Explanation:
Management's Role in Fraud Monitoring:
Employees should be aware that management monitors lifestyle and behavior changes. Transparency discourages fraudulent behavior by reinforcing accountability.
Effect of Transparency:
Awareness of monitoring helps maintain a culture of ethical behavior and reduces the likelihood of fraud.
Conclusion:The statement is false because employees should know that management is vigilant about potential fraud indicators.
References:ACFE guidance on fraud prevention and monitoring.

NEW QUESTION # 187
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