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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Sample Questions:

1. A company implements a fraud hotline but does not allow anonymous reporting. What is the MOST likely consequence?

A) Elimination of false allegations
B) Reduced employee concerns about retaliation
C) Fewer tips and reduced reporting effectiveness
D) Increased reporting rates

2. Julia, an internal auditor, is formalizing a process to evaluate the effectiveness of the company's control system over time, including both ongoing evaluations and periodic, separate evaluations.
Julia's initiative BEST pertains to the component of the Committee of Sponsoring Organizations of the Treadway Commission's COSO Internal Control--Integrated Framework the Framework:

A) Monitoring
B) Control activities
C) Control environment
D) Risk assessment

3. Black, a Certified Fraud Examiner CFE, was hired to conduct a fraud examination. He did not find fraud, but in Black's opinion, the controls he examined were deficient. Under the ACFE Code of Professional Ethics, which of the following is TRUE?

A) Black may include his opinion on the internal control deficiencies in his report to management only if he gets formal approval from the board of directors.
B) Black may include his opinion on the internal control deficiencies in his report to management only if he amends his engagement letter.
C) Black is not permitted to express his opinion on the internal control deficiencies in his report to management under any circumstances.
D) Black may include his opinion on the internal control deficiencies in his report to management because it is a technical matter.

4. Which of the following statements regarding monitoring employees for warning signs of fraud is MOST ACCURATE?

A) Employees who steal do not commonly display lifestyle or behavioral warning signs of their misdeeds.
B) Managers should be instructed to observe employees for any unusual lifestyle improvements, such as an unexplained increase in luxury purchases.
C) An increase in employee wealth is always a sign of fraud that should be investigated.
D) Managers should only observe employees for signs of suspicious behavioral or lifestyle changes if they can do so without the employees' knowledge.

5. Rhys, a Certified Fraud Examiner (CFE), was hired to conduct a fraud examination at Marvel Company. His examination did not reveal any conclusive evidence that fraud had occurred or was occurring. Consequently, Marvel's management asked Rhys to state in his official examination report that the company is free of fraud as a means of assuring the board of directors that the company's anti-fraud controls were effective. Which of the following is TRUE regarding the ACFE Code of Professional Ethics in this situation?

A) The ACFE Code of Professional Ethics allows Rhys to comply with management's request without limitations.
B) The ACFE Code of Professional Ethics absolutely prohibits Rhys from complying with management's request.
C) The ACFE Code of Professional Ethics allows Rhys to comply with management's request only if the company has liability insurance to cover an incorrect assertion.
D) The ACFE Code of Professional Ethics allows Rhys to comply with management's request only if he can find another CFE to co-sign his report.

Solutions: