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

1. Which of the following is a TRUE statement regarding fraud risks?

A) The objective of anti-fraud controls is to completely eliminate the inherent fraud risk.
B) Residual risks are risks that are present before the effect of internal controls.
C) Inherent risks are risks that remain after efforts are made to mitigate fraud risk.
D) The objective of anti-fraud controls is to reduce the residual fraud risk to a level that is significantly lower than the inherent fraud risk.

2. Criminologist Charles McCaghy has stated that regulatory pressure is the single most compelling factor behind deviance by organizations.

A) True
B) False

3. A fraud risk assessment identifies a scheme that has a low likelihood of occurrence but would cause catastrophic financial and reputational damage. How should the organization treat this risk?

A) Evaluate both likelihood and impact when determining mitigation priorities
B) Remove it from the assessment
C) Focus only on frequent fraud risks
D) Ignore it because likelihood is low

4. The internal auditor's fraud-related responsibilities include which of the following?

A) Attesting that the organization's financial statements are free of material misstatements caused by fraud
B) Reporting to regulators regarding the entity's vulnerability to fraud
C) Overseeing management's actions to manage fraud risks
D) Evaluating whether management is actively retaining responsibility for oversight of the fraud risk management program

5. International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the establishment of anti-fraud internal controls within an organization.

A) True
B) False

Solutions: