CFE-Fraud-Prevention-and-Deterrence Dumps 2025 - New ACFE CFE-Fraud-Prevention-and-Deterrence Exam Questions
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NEW QUESTION # 103
Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?
- A. Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented tnem.
- B. Management must balance the investment in anti-fraud controls with the benefit of those controls and the amount of risk it is willing to accept.
- C. Management must assign a quantitative measure to its risk appetite so that it can accurately measure the fraud risk management program's effectiveness.
- D. Management should tailor the detailed objectives of the fraud risk management program to the organization's specific needs and goals.
Answer: C
NEW QUESTION # 104
Which of the following Is TRUE regarding an organization's ethics program?
- A. To be most effective, access to the organization's ethics policy should be restricted to employees and other Internal parties only
- B. In designing the ethics program, management should consider whether the organization currently has any ethical leadership Issues
- C. All of the above
- D. An effective written ethics policy alone is sufficient to communicate management's ethical philosophy and serve as a comprehensive ethics program
Answer: B
NEW QUESTION # 105
According to the differential reinforcement theory, behavior is weakened when positive rewards are gained or punishment is avoided
- A. False
- B. True
Answer: B
NEW QUESTION # 106
Which of the following is NOT a factor that directors and management should consider when developing a corporate governance framework for an organization?
- A. The organization's cultural environment
- B. The legal and regulatory environment in which the organization operates
- C. The ability of the framework to remain static during changes in the corporate landscape
- D. The organization's ethical environment
Answer: C
Explanation:
Corporate Governance Framework Requirements:
* A corporate governance framework must be dynamic, adapting to changes in regulations, markets, and corporate landscapes.
* It must consider legal, ethical, cultural, and operational environments.
Why B is Incorrect:
* A static framework cannot accommodate evolving business risks, regulatory changes, and cultural shifts, leading to governance failures. Flexibility is critical for sustainability and resilience.
References:
* ACFE governance best practices and COSO framework guidance highlight the importance of adaptability in governance frameworks.
NEW QUESTION # 107
Which of the following theories suggests that, when considering the possibility of violating a law. people are likely to ask themselves. "What will my spouse think if they find out?"
- A. Social control theory
- B. Behavioral theory
- C. Cognitive theory
- D. Operant theory
Answer: A
Explanation:
* Social Control Theory Overview:
* This theory posits that individuals consider social and personal relationships when deciding whether to commit a crime. They reflect on the potential consequences of their actions on their relationships and social standing.
* Application to the Scenario:
* The question of "What will my spouse think?" aligns directly with social control theory, as it involves weighing personal consequences within a social context.
* Analysis of Other Options:
* B. Operant theory: Focuses on behavior modification through rewards and punishments.
* C. Cognitive theory: Centers on thought processes and decision-making patterns.
* D. Behavioral theory: Examines the external influences on behavior, not personal social relationships.
* Conclusion:Social control theory best explains the scenario.
NEW QUESTION # 108
Which of the following is FALSE regarding a fraud risk assessment?
- A. The assessment team should consider how employees behave as part of its assessment
- B. The objective of the assessment is to help the organization identify what makes it most vulnerable to fraud.
- C. The designation of an area as high risk should only occur if the assessment has conclusively revealed that fraud is occurring there.
- D. The assessment should be used to improve employee fraud awareness
Answer: C
NEW QUESTION # 109
Fraud risks related to regulatory and legal misconduct include all of the following EXCEPT:
- A. Fraudulent customer payments
- B. Anti-competitive practices
- C. Insider trading
- D. Conflicts of interest
Answer: D
NEW QUESTION # 110
Which of the following is NOT a responsibility of the organization s board of directors?
- A. Assessing the strategy and underlying purpose of management's decisions and actions
- B. Acting as guardians of the organization s resources and assets
- C. Serving as the middlemen between shareholders and management
- D. Managing the performance of employees charged with carrying out business activities
Answer: C
NEW QUESTION # 111
According to Diane Vaughan. which of the following factors increases an organization s inherent inclination toward committing crime?
- A. Management links employee performance goals with company performance goals
- B. Management seeks out diversity in attitudes and perspectives when hiring employees
- C. Rewards are given to employees who challenge the status quo
- D. All of the above
Answer: C
NEW QUESTION # 112
Which of the following statements is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?
- A. Professional skepticism means beginning all assignments with the belief that something is amiss.
- B. Fraud examiners should form the engagement hypothesis without regard to the available preliminary information.
- C. Professional skepticism involves maintaining a mindset that no fraud has occurred
- D. Fraud examiners should not relax their skeptical attitudes under any circumstances.
Answer: D
Explanation:
Professional Skepticism Defined:
Professional skepticism is an attitude that includes a questioning mind and a critical assessment of evidence.
Fraud examiners must remain vigilant to indications of potential fraud throughout an engagement.
Consistent Application:
ACFE standards emphasize that skepticism should be applied consistently, even if initial findings do not indicate fraud, to avoid overlooking potential risks.
Why D is Correct:
Relaxing skepticism can lead to missed evidence or poor judgment, undermining the examination's effectiveness.
NEW QUESTION # 113
The theory of differential association is used frequently lo explain white-collar criminality. Which of the following is NOT one of the assertions or principles of differential association?
- A. Criminal behavior is explained by an individual's general needs and values.
- B. Criminal behavior is acquired through participation with intimate personal groups.
- C. Criminal behavior is learned from other people in a process of communication.
- D. Criminal behavior is learned using the same mechanisms as other learning
Answer: A
NEW QUESTION # 114
According to behaviorists such as B. F. Skinner, which of the following scenarios is MOST LIKELY to occur when an undesired behavior is punished?
- A. The behavior will be permanently suppressed
- B. The behavior will occur more frequently.
- C. The behavior will not be affected by the punishment
- D. The behavior will return when punishment ceases
Answer: D
Explanation:
* Understanding Behaviorism and Punishment:
* Behaviorists like B. F. Skinner argue that punishment temporarily suppresses undesired behaviors rather than eliminating them.
* Once the punitive stimulus is removed, the behavior is likely to reappear unless it is replaced with a more desirable behavior through reinforcement.
* Analysis of Options:
* B. Permanently suppressed: This contradicts the principles of behaviorism, as punishment alone does not permanently modify behavior.
* C. Occur more frequently: Punishment typically decreases behavior temporarily.
* D. Not affected by punishment: Punishment impacts behavior, but the effect is often temporary.
* Conclusion:The most likely outcome is that the behavior will return once the punishment ceases.
NEW QUESTION # 115
Which of the following statements is MOST ACCURATE regarding an effective system of anti-fraud controls?
- A. It prioritizes implementing detective controls over preventive controls.
- B. It fully eliminates the risk of fraud by removing opportunities for misbehavior.
- C. It focuses more on preventive controls than detective controls.
- D. It deters fraudsters by increasing the perception that fraud will be detected.
Answer: D
NEW QUESTION # 116
Which of the following is FALSE regarding an organization's anti-fraud policy?
- A. To avoid legal problems in discharging employees, the anti-fraud policy should not include any specific examples of frau and misconduct.
- B. One of the most important considerations in developing the anti-fraud policy is to ensure every allegation is handled in a uniform manner.
- C. A detailed anti-fraud policy can make it easier to investigate and punish employees who commit fraud and other dishonest acts.
- D. In developing the anti-fraud policy, management should check with legal counsel regarding any legal considerations with respect to the policy.
Answer: A
Explanation:
* nti-Fraud Policy Components:
* A robust anti-fraud policy should provide clear definitions and examples of fraud and misconduct to ensure employees understand what constitutes unacceptable behavior.
* Specific examples make investigations and enforcement more consistent and defensible.
* Analysis of Option B:
* Avoiding specific examples creates ambiguity, which can hinder enforcement and increase legal risks when discharging employees.
* Properly vetted examples, reviewed with legal counsel, help ensure compliance with legal standards.
* Conclusion:Option B is false because including examples of fraud and misconduct strengthens the anti- fraud policy.
References:ACFE guidance on anti-fraud policies and employee misconduct.
NEW QUESTION # 117
According to ACFE research, which of the following is TRUE regarding the three major categories of occupational fraud?
- A. Asset misappropriation schemes are the most common category of occupational fraud.
- B. Corruption schemes are the costliest category of occupational fraud.
- C. Financial statement fraud schemes are the most common category of occupational fraud.
- D. Identity theft is both the most common and costliest category of occupational fraud.
Answer: A
Explanation:
ACFE research indicates that asset misappropriation schemes, such as theft of cash or inventory, are the most common type of occupational fraud. While they are frequent, they typically result in lower financial losses compared to corruption or financial statement fraud, which are less common but can cause greater financial damage.
NEW QUESTION # 118
During the course of a fraud examination. Stefan, an employee of Acme Inc., approaches Marten, a Certified Fraud Examiner (CFE) and fellow employee of Acme, and tells him that he knows of a major fraud being committed by the chief financial officer (CFO). However. Stefan says he can only provide details if Marten promises him absolute confidentiality. How should Marten respond?
- A. Agree that the information will be held in confidence, even though Marten knows it will not be
- B. Tell Stefan that he will try to keep the information as confidential as possible
- C. Not agree to the request for confidentiality
- D. Take Stefan's request straight to Acme Inc.'s management
Answer: B
NEW QUESTION # 119
Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?
- A. Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented tnem.
- B. Management must balance the investment in anti-fraud controls with the benefit of those controls and the amount of risk it is willing to accept.
- C. Management must assign a quantitative measure to its risk appetite so that it can accurately measure the fraud risk management program's effectiveness.
- D. Management should tailor the detailed objectives of the fraud risk management program to the organization's specific needs and goals.
Answer: C
Explanation:
* Defining Fraud Risk Management Objectives:
* Management should focus on tailoring objectives to the organization's needs, examining past fraud incidents, and balancing costs with benefits. Assigning a quantitative measure to risk appetite, while potentially useful, is not a requirement for effective fraud risk management.
* Analysis of Options:
* A. Examining previous frauds: This helps identify vulnerabilities and design controls.
* B. Balancing costs and benefits: Essential to ensure the program's efficiency and feasibility.
* D. Tailoring objectives: Necessary for aligning the program with organizational goals.
* Conclusion:Option C is false because assigning a quantitative measure to risk appetite is not mandatory in defining fraud risk management objectives.
References:ACFE materials on fraud risk management program design and implementation.
NEW QUESTION # 120
Which of the following is included in the G20/OECD Principles of Corporate Governance?
- A. A requirement for a corporate governance framework that protects the exercise of management's rights.
- B. An emphasis on the importance of timely, accurate, and transparent disclosure mechanisms.
- C. A request that governments implement effective internal controls to support good corporate governance practices.
- D. Support for the equal treatment of all members of an organization's governing body.
Answer: C
NEW QUESTION # 121
During a fraud risk assessment, the assessment team is seeking information on the ethical tone set by upper and middle managers. The team members determine that, for this task, they would like to get candid one-on-one feedback from employees away from their peers. Which of the following techniques would be most helpful for them to use in gathering this information?
- A. Anonymous feedback mechanisms
- B. Interviews
- C. Surveys
- D. Focus groups
Answer: B
NEW QUESTION # 122
Maria conducted a fraud examination that led to a valid confession of guilt from Rita. In Maria's verbal report to her superiors, she stated that, in her opinion. "Rita is guilty of embezzlement." Maria has just violated the ACFE Code of Professional Ethics.
- A. False
- B. True
Answer: B
Explanation:
ACFE Code of Professional Ethics:
* Fraud examiners must avoid expressing opinions about guilt or innocence. They are tasked with presenting evidence and findings objectively, leaving determinations of guilt to legal or regulatory authorities.
Why A is Correct:
* Maria's statement that "Rita is guilty" constitutes a violation because it goes beyond the role of a fraud examiner.
References:
* ACFE standards emphasize objectivity and avoidance of subjective judgments in fraud reporting.
NEW QUESTION # 123
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