Free Practice Questions for ACFE CFE-Fraud-Prevention-and-Deterrence Exam

Positive reinforcement

Loss of reward

Punishment

Negative stimuli

Lori accepts an assignment to infiltrate her employer and transmit inside information to a competitor.

Ren undertakes an external engagement that requires him to work outside the normal work hours of his primary employer.

DeVon undertakes engagements for both sides in a case of an alleged fraudulent warranty scheme.

Karen accepts an assignment to search for fraud indicators at an organization in which she is an undisclosed partner.

Offer a bonus to anyone whose drawer reconciles perfectly for sixty days.

Publicly call out and criticize employees whose cash drawers are over or short.

Take away an hour of paid time off for each time the drawer is over or short

Demote employees who continue to have reconciliation discrepancies

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

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

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

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

To be most effective, access to the organization's ethics policy should be restricted to employees and other Internal parties only

In designing the ethics program, management should consider whether the organization currently has any ethical leadership Issues

An effective written ethics policy alone is sufficient to communicate management's ethical philosophy and serve as a comprehensive ethics program

All of the above

"The evidence does not support Dean's confession."

"Dean is guilty of embezzlement."

"Dean's confession is supported by the evidence."

"Dean confessed to embezzlement."

Assuming the risk

Mitigating the risk

Avoiding the risk

Transferring the risk

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.

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.

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.

All of the above are violations.

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

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

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

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

Corporate violations that involve large sums of money are often spread among so many organizations that each gains very little individually.

Violations are caused by innocent errors in judgment rather than economic necessity.

Government regulations are justified because the additional costs of regulations and bureaucratic procedures increase government profits.

Government regulation is unnecessary because the matters being regulated are unimportant.