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

1. Which statement BEST describes fraud deterrence?

A) Fraud deterrence eliminates the need for internal controls
B) Fraud deterrence guarantees fraud will never occur
C) Fraud deterrence seeks to reduce the likelihood of fraud through prevention and detection measures
D) Fraud deterrence focuses only on punishment after fraud occurs

2. Which of the following scenarios would MOST LIKELY be considered a violation of the ACFE Code of Professional Ethics?

A) Dee, a CFE, accepted an assignment to conduct a fraud examination within a manufacturing company. Because she rushed to complete the investigation, she overlooked key items of evidence and failed to uncover a fraud scheme.
B) Riva, a CFE, uncovered material internal control deficiencies that were material but unrelated to the kickback scheme she was investigating. In her final report to management, Riva included information about the deficiencies despite their being unrelated to the situation she was hired to investigate.
C) Derrick, a CFE, was hired by a client to conduct a fraud examination but found nothing abnormal.
A year later, he received a court order to provide the client's file to the court. Derrick complied with the court order despite not having the client's authorization to provide the file.
D) All of the above are violations.

3. A fraud risk assessment identifies a scheme that has a low likelihood of occurrence but would cause catastrophic financial and reputational damage. How should the organization treat this risk?

A) Remove it from the assessment
B) Ignore it because likelihood is low
C) Focus only on frequent fraud risks
D) Evaluate both likelihood and impact when determining mitigation priorities

4. International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the establishment of anti-fraud internal controls within an organization.

A) False
B) True

5. Which of the following is FALSE regarding an organization's anti-fraud policy?

A) A detailed anti-fraud policy can make it easier to investigate and punish employees who commit fraud and other dishonest acts.
B) In developing the anti-fraud policy, management should check with legal counsel regarding any legal considerations with respect to the policy.
C) One of the most important considerations in developing the anti-fraud policy is to ensure every allegation is handled in a uniform manner.
D) To avoid legal problems in discharging employees, the anti-fraud policy should not include any specific examples of frau and misconduct.

Solutions: