acfe cfe fraud prevention and deterrence practice test

[Criminology and Ethics]
According to modern criminological studies, which of the following is the determinant aspect of
white-collar crime?

• A. Cultural ties
• B. Criminal history
• C. Organizational opportunity
• D. Social class

[Ethical Responsibilities of the Fraud Examiner]
Which of the following would MOST LIKELY be a violation of the ACFE Code of Professional Ethics?

• A. Green a CFE, uncovered several material internal control deficiencies unrelated to the financial statement fraud he was investigating. In his final report to management. Green included information about the deficiencies even though they were unrelated to the situation he was hired to investigate.
• B. Stephanie, a CFE, accepted a fraud examination assignment and then instructed a lower-level employee to assess the company's cash records for signs of fraud. She took his word when he said there was no evidence of wrongdoing and ended up failing to uncover a very costly fraud scheme.
• C. Susan, a CFE, was hired by a client to conduct a fraud examination but found nothing amiss A year later, she received a legal order from the local prosecutor's office to provide the client's file. Susan complied with the court order, even though she did not have the client's authorization to do so.
• D. All of the above are violations

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

[Corporate Governance]
Which of the following principles of corporate governance pertains to the duty of the organization to
act in the best interest of society?

• A. Transparency
• B. Responsibility
• C. Fairness
• D. Accountability

[Fraud Risk Management]
Which of the following statements is TRUE regarding how fraud examiners should exercise
professional skepticism during a fraud examination engagement?

• A. Professional skepticism means beginning all assignments with the belief that something is amiss.
• B. Professional skepticism involves maintaining a mindset that no fraud has occurred
• C. Fraud examiners should form the engagement hypothesis without regard to the available preliminary information.
• D. Fraud examiners should not relax their skeptical attitudes under any circumstances.

[Corporate Governance]
Which of the following is TRUE regarding G20/OECD Principles of Corporate Governance (the
Principles)?

• A. The Principles are required to be implemented by all corporations in the jurisdictions that have officially adopted them
• B. The Principles state that an entity's corporate governance framework should discourage active cooperation between corporations and stakeholders in creating wealth.
• C. The Principles are intended to be applicable in developed economies but not in emerging markets.
• D. The Principles state that an entity's corporate governance framework should ensure the equitable treatment of all shareholders.

[Fraud Risk Management]
According to the authors of Crimes of the Middle Classes, all of the following factors have
contributed to the rising problem of economic crime EXCEPT:

• A. The continued pressures of a culture that rewards affluence and success
• B. The economy's increased reliance on credit
• C. The increased constraints of the regulatory environment for businesses
• D. The increased opportunity for wrongdoing as a result of advancing information technologies

[Fraud Risk Management]
Management at ABC Corp. is assessing the company's ethical tone and how it affects the
organization's fraud risk. To most effectively reinforce an anti-fraud culture, management should:

• A. Use a checklist of initiatives to make sure all the elements of a strong tone at the top are in place
• B. Create an environment in which employees feel safe challenging management's decisions
• C. implement two separate sets of ethics policies, one for management and one for employees
• D. All of the above

[Fraud Risk Management]
The existence of many specialized departments within a company generally decreases the overall risk
of fraud within the organization.

• A. True
• B. False

[White-Collar Crime]
Criminologist Charles McCaghy has stated that regulatory pressure is the single most compelling
factor behind deviance by organizations.

• A. True
• B. False