CFE-Fraud-Prevention-and-Deterrence by ACFE Valid Free Exam Practice Test

Question 1

Which of the following scenarios would MOST LIKELY be considered a violation of the ACFE Code of Professional Ethics?

A. Grace, a CFE, uncovered internal control deficiencies that were material but unrelated to the financial statement fraud she was investigating. In her final report to management, Grace included information about the deficiencies despite their being unrelated to the situation she was hired to investigate. B. All of the above are violations. C. Eric, a CFE, accepted a fraud examination assignment and then instructed his employee to assess the company's accounts receivable for indications of fraud. He accepted the employee's work that showed no evidence of fraud without conducting his own assessment. However, the employee missed some key information, causing Eric to fail to uncover a costly fraud scheme. D. Mae, a CFE, was hired by a client to conduct a fraud examination but found nothing unusual. A year later, she received a legal order from the local prosecutor ' s office to provide the client's file. Mae complied with the court order despite not having the client ' s authorization to provide the file.

Correct Answer: B

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Question 2

The differential reinforcement theory asserts that behavior is strengthened when ________ is/are applied.

A. Positive reinforcement B. Punishment C. Repeated warnings D. Negative stimuli

Correct Answer: A

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Question 3

Which of the following is FALSE regarding the fraud risk assessment learn?

A. The team members might include both internal and external sources. B. The team members should have experience in gathering and eliciting information C. The team should consist of individuals with diverse knowledge, skills, and perspectives D. The team size should be limited to a maximum of three individuals

Correct Answer: D

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Question 4

Which of the following is included in the G20/OECD Principles of Corporate Governance?

A. A requirement for a corporate governance framework that protects the exercise of management's rights. B. An emphasis on the importance of timely, accurate and transparent disclosure mechanisms. C. A request that governments implement effective internal controls to support good corporate governance practices. D. Support for the equal treatment of all members of an organization's governing body.

Correct Answer: B

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Question 5

ArtisanWare, Inc. is a retailer of high-end kitchen supplies. The company receives a very large order from EFG Company, a new customer in a different country that wants to pay on credit. Which of the following is MOST ACCURATE regarding the due diligence procedures that ArtisanWare should perform on EFG before proceeding with this transaction?

A. ArtisanWare should perform the same level of due diligence as it would for any other customer to avoid claims of discrimination. B. ArtisanWare only needs to undertake due diligence procedures if EFG conducts business in countries with known corruption risks. C. ArtisanWare does not need to take any specific procedures to verify EFG ' s identity before accepting the transaction. D. ArtisanWare should examine EFG ' s net worth as part of deciding whether to allow the purchase on credit.

Correct Answer: D

Question 6

Which of the following is NOT included in G20/OECD Principles of Corporate Governance (the Principles)?

A. Recognition of the importance of the role of stakeholders in corporate governance B. Guidance regarding appropriate board structures, responsibilities, and procedures C. A request that governments have in place an appropriate framework to support good corporate governance practices D. Support for establishing stronger protection for foreign shareholders than for domestic shareholders

Correct Answer: D

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Question 7

Malcolm, a Certified Fraud Examiner (CFE), is conducting a fraud examination. He notes that he must conduct himself in accordance with the ACFE Code of Professional Ethics. Which of the following actions is explicitly prohibited by this Code?

A. Giving opinions regarding technical matters. B. Providing conclusions based on evidence. C. Participating in conduct that could be considered unethical. D. Accepting assignments with disclosed conflicts of interest.

Correct Answer: C

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Question 8

Which of the following statements regarding recommended vendor due diligence procedures is MOST ACCURATE?

A. An organization should request that new vendors fill out a questionnaire about their background immediately after signing a contract with them. B. An organization should subject vendors to an internal audit conducted by the organization ' s own auditors before agreeing to do business with them. C. An organization should include a clause in the contract requiring the vendor to report any misconduct before entering into an agreement with them. D. An organization should avoid revealing that it is seeking information about potential vendors prior to starting a relationship with them.

Correct Answer: C

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Question 9

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

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

Correct Answer: D

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Question 10

Which of the following is TRUE regarding the internal audit function ' s reporting responsibilities pertaining to fraud?

A. The internal audit function should discuss how and when to report fraud-related issues with senior management and the board of directors before such issues arise. B. The internal audit function is not permitted to communicate with the board of directors about fraud, as that is the responsibility of external auditors. C. The internal audit function should not disclose the results of its fraud audits to senior management or the board of directors in order to maintain independence. D. The internal audit function is permitted, but not required, to periodically report about the organization ' s fraud risks to senior management and the board of directors.

Correct Answer: A

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Question 11

Terrel, a Certified Fraud Examiner (CFE), unknowingly violates the law one night. Which of the following statements about the ACFE Code of Professional Ethics is TRUE?

A. This conduct would be a violation of the ACFE Code of Professional Ethics. B. This conduct would not be a violation of the ACFE Code of Professional Ethics under any circumstances. C. This conduct would be a violation of the ACFE Code of Professional Ethics only if Terrel knew the conduct was illegal. D. This conduct would be a violation of the ACFE Code of Professional Ethics only if Terrel is arrested.

Correct Answer: A

Question 12

Mary is charged with implementing a fraud reporting program on behalf of her organization. Which of the following is a best practice that Mary should follow to ensure that the program is successful?

A. Mary should inform employees that they are required to report any information about potential fraud directly and only to their immediate supervisor. B. Mary should inform employees that they will be held accountable for reporting tips that cannot be verified. C. Mary should inform employees that the names of all individuals who report misconduct will be shared with the organization's governing body and law enforcement. D. Mary should inform employees of the precise methods for reporting potential fraud, such as completing an online form.

Correct Answer: D

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Question 13

Which of the following statements is MOST ACCURATE?

A. Managers should ensure that employees remain unaware that they are being observed for signs of suspicious behavioral or lifestyle changes. B. Educating employees about hotlines and reporting programs has a limited effect on employees' perception of detection. C. Controls are most effective in preventing theft and fraud if those at risk know of the presence of possible detection. D. Audits are most effective as a fraud prevention mechanism when they are conducted covertly without employees' awareness or knowledge.

Correct Answer: C

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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence - CFE-Fraud-Prevention-and-Deterrence Exam Practice Test