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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.

A well-developed sense of moral philosophy and the ability to distinguish right from wrong

C.

The ability to conceal errors to preserve the reliability of the work performed

D.

Avoidance of differences of opinion on all material matters

Which of the following is TRUE regarding the components of the Committee of Sponsoring Organizations of the Treadway Commission ' s (COSO) Internal Control—Integrated Framework (the Framework)?

A.

Determining the effectiveness of an organization ' s internal control system involves assessing whether all of the identified components are in place and functioning effectively.

B.

Determining the effectiveness of an organization ' s internal control system involves assessing whether the identified components meet minimum legal and compliance requirements.

C.

Independent oversight is one of the primary components of internal control identified in the Framework.

D.

The Framework identifies ten components of internal control that must all be in place for the internal control system to be effective.

Christopher is conducting an external audit of a company in a jurisdiction that is subject to International Standards on Auditing (ISAs). While conducting his audit procedures, he discovers evidence of a fraud involving Jeffrey, the company’s chief executive officer (CEO). Which of the following options is Christopher’s BEST response to these findings?

A.

Christopher should immediately report his findings to the relevant government authority.

B.

Christopher should report his findings to those charged with governance of the organization.

C.

Christopher should not disclose his findings to any other parties due to legal liability.

D.

Christopher should confront Jeffrey with his audit findings and try to get a confession.

A government auditor is conducting a financial statement audit of a public-sector entity in accordance with the International Standards of Supreme Audit Institutions (ISSAI). Which of the following is TRUE regarding the auditor ' s consideration of fraud during this engagement?

A.

In addition to fraud, the auditor should remain alert to potential occurrences of abuse during the audit.

B.

The auditor has the automatic ability to withdraw from the audit engagement if fraud is found.

C.

The requirements found in International Standard on Auditing (ISA) 240 do not apply to the engagement

D.

The objectives of the audit are likely narrower than those of a private-sector financial statement audit.

Which of the following statements BEST describes a recommended practice for organizations to follow when developing a formal anti-fraud policy?

A.

The policy should not include discussions of any legal considerations to limit potential legal liability in the future.

B.

The policy should include language ensuring that every allegation and offender will be managed in a uniform manner.

C.

The policy should be drafted as broadly and generally as possible so that it can easily be applied across all departments and jurisdictions.

D.

The policy should avoid any specific examples of what is considered fraud so that management is not limited to those situations when it needs to terminate a dishonest employee.

(Andrea is leading the fraud risk assessment process for her organization. Which of the following considerations about the fraud risk assessment process is MOST ACCURATE and should be incorporated into Andrea’s plans?)

A.

The fraud risk assessment is most effective when management’s influence on the process is limited.

B.

Conducting an effective fraud risk assessment requires thinking like a fraudster.

C.

If the individuals conducting the fraud risk assessment believe that fraud could not happen at the organization, then the assessment process should reflect that belief.

D.

To ensure the independence of the team members, a consultant or another external party must conduct the fraud risk assessment.

Which of the following is TRUE regarding an organization ' s ethics program?

A.

An ethics program should avoid addressing rewards for ethical behavior and sanctions for unethical behavior

B.

In designing the ethics program, management should consider how stakeholders throughout the organization define success

C.

To be most effective, access to the organization’s ethics policy should be restricted to external parties such as vendors and customers

D.

Having a written ethics policy is sufficient to communicate management’s ethical philosophy and serve as a comprehensive ethics program

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

A.

Trustworthiness

B.

A well-developed sense of moral philosophy

C.

Avoidance of conflicts of interest

D.

Refusal to admit errors

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 only if Terrel knew the conduct was illegal.

B.

This conduct would be a violation of the ACFE Code of Professional Ethics only if Terrel is arrested.

C.

This conduct would not be a violation of the ACFE Code of Professional Ethics under any circumstances.

D.

This conduct would be a violation of the ACFE Code of Professional Ethics.