CFE-Fraud-Prevention-and-Deterrence Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Questions and Answers

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

XYZ does not need to take any specific procedures to verify ABC's identity before accepting the transaction

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

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

The Principles are required to be implemented by all corporations in the jurisdictions that have officially adopted them

The Principles state that an entity's corporate governance framework should discourage active cooperation between corporations and stakeholders in creating wealth.

The Principles are intended to be applicable in developed economies but not in emerging markets.

The Principles state that an entity's corporate governance framework should ensure the equitable treatment of all shareholders.

Elena should suspend the audit and begin a new audit focused on the internal controls

Elena should report the findings in writing to the appropriate law enforcement agencies.

Elena should provide a written communication about the findings to senior management.

Elena should work independently to correct the underlying internal control deficiency.

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.

Criminal behavior is explained by an individual's general needs and values.

Criminal behavior is acquired through participation with intimate personal groups.

Criminal behavior is learned from other people in a process of communication.

Criminal behavior is learned using the same mechanisms as other learning

The objective of the assessment is to help the organization identify what makes it most vulnerable to fraud.

The assessment should be used to improve employee fraud awareness

The assessment team should consider how employees behave as part of its assessment

The designation of an area as high risk should only occur if the assessment has conclusively revealed that fraud is occurring there.

Fraudulent customer payments

Anti-competitive practices

Insider trading

Conflicts of interest

Guidance regarding appropriate board structures, responsibilities, and procedures

Support for establishing stronger protection for foreign shareholders than for domestic shareholders

A request that governments have in place an appropriate framework to support good corporate governance practices

Recognition of the importance of the role of stakeholders in corporate governance

True

False

Perceived non-shareable financial need

Rationalization

Perceived opportunity

Lack of personal Integrity

Fully eliminates the risk of fraud

Focuses more on detective controls than preventive controls

Focuses more on preventive controls than detective controls

Increases the perception that fraud will be detected

Asset misappropriation; corruption

Corruption, asset misappropriation

Financial statement fraud: corruption

Asset misappropriation: financial statement fraud

Trustworthiness

A well-developed sense of moral philosophy

Avoidance of conflicts of interest

Refusal to admit errors

Rewards are given to employees who challenge the status quo

Management encourages employee loyalty through social functions

Management separates employee performance goals from company performance goals

All of the above

True

False

The internal audit function should discuss how and when to report fraud-related issues with senior management and the board of directors before such issues arise.

The internal audit function is permitted, but not required, to periodically report about the organization's fraud risks to senior management and the board of directors.

The internal audit function should not disclose the results of its fraud audits to senior management or the board of directors in order to maintain independence.

The internal audit function is not permitted to communicate with the board of directors about fraud, as that is the responsibility of external auditors.

True

False

Positive reinforcement

Negative reinforcement

Punishment

None of the above