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

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Total 284 questions

Formally documenting and communicating organizational hierarchies, including the proper flow of information, can hinder an organization ' s fraud prevention initiatives.

A.

True

B.

False

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 only needs to undertake due diligence procedures if EFG conducts business in countries with known corruption risks.

B.

ArtisanWare does not need to take any specific procedures to verify EFG ' s identity before accepting the transaction.

C.

ArtisanWare should perform the same level of due diligence as it would for any other customer to avoid claims of discrimination.

D.

ArtisanWare should examine EFG ' s net worth as part of deciding whether to allow the purchase on credit.

According to International Organization for Standardization (ISO) 31000:2018, an effective and efficient risk management program contains all of the following principles EXCEPT:

A.

The program takes human and cultural factors into account.

B.

The program is static and consistent, even during times of organizational change.

C.

The program facilitates continuous improvement.

D.

The program is customized and proportionate to the organization ' s operations and objectives.

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

As part of its anti-fraud program, Elm Company is outlining the responsibilities of different stakeholders. Who is ultimately responsible for ensuring the effectiveness of the organization ' s anti-fraud program?

A.

Forensic accountants

B.

Management

C.

The compliance function

D.

Internal auditors

According to the differential reinforcement theory, behavior is strengthened when which of the following is applied?

A.

Positive reinforcement

B.

Loss of reward

C.

Punishment

D.

Negative stimuli

Warren wants to decrease the amount of cash register discrepancies among the cashiers at his small business. According to behaviorist theories, which of the following options would be the MOST EFFECTIVE way for Warren to encourage the cashiers to reduce their discrepancies and keep their cash drawers balanced?

A.

Demote employees who continue to have reconciliation discrepancies.

B.

Publicly praise employees every time their cash drawers are balanced.

C.

Deduct an hour ' s worth of pay for anyone whose cash drawer is not perfectly reconciled each day.

D.

Take away an hour of paid time off from an employee each time their cash drawer is not balanced.

According to ACFE research, which of the following is TRUE regarding prosecutions of white-collar criminals?

A.

The most common internal response to a substantiated fraud case is to terminate the employee.

B.

Only a small percentage of perpetrators are punished when an organization handles a fraud case internally.

C.

Most fraud cases are only handled internally and are not referred to law enforcement for prosecution.

D.

The primary reason that organizations decline to prosecute fraud cases is a lack of evidence.

Management at Alpha Company is developing a corporate compliance program. To ensure that the program will be effective, management should both incentivize employees for their compliance and discipline them for any violations.

A.

True

B.

False

Which of the following statements is FALSE regarding an organization ' s fraud risk management program?

A.

The program must include mechanisms to address breaches in compliance.

B.

The punishment for intentional noncompliance should be carried out in a consistent and firm manner.

C.

Formal sanctions for intentional noncompliance should be determined and enacted privately

D.

A specific individual or team should be designated as responsible for monitoring compliance with the program