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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Sample Questions (Q191-Q196):

NEW QUESTION # 191
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 Black is not permitted to express his opinion on the deficient controls.

A. False
B. True

Answer: A

Explanation:
* ACFE Code of Professional Ethics on Reporting Findings:
* The Code allows fraud examiners to report on deficiencies in controls if these are relevant to their engagement. Highlighting such deficiencies helps improve the organization's anti-fraud measures.
* Why B is Correct:
* Black is permitted to express his opinion about deficient controls, even if no fraud is found, as long as his conclusions are based on evidence and within the scope of his professional expertise.
* References:
* ACFE ethical guidelines encourage examiners to report all relevant findings to promote transparency and improved governance.
References for All Questions:
* ISA 240 and professional auditing standards on fraud-related responsibilities.
* ACFE Code of Professional Ethics and Fraud Examination Guide.
* Principles of professional skepticism in fraud detection and examination.

NEW QUESTION # 192
Which of the following factors increases an organization's inherent inclination toward committing crime according to Diane Vaughan's research?

A. Management seeks diversity in attitudes and perspectives when hiring employees.
B. Management rewards employees who challenge how the company functions.
C. Management encourages employee loyalty through social functions.
D. Management separates employee performance goals from company performance goals.

Answer: D

NEW QUESTION # 193
In response to a risk identified during a fraud risk assessment, management decides to implement additional internal control measures. This response is known as:

A. Avoiding the risk
B. Assuming the risk
C. Transferring the risk
D. Mitigating the risk

Answer: D

Explanation:
* Understanding Fraud Risk Management Responses:
* Risk mitigation refers to implementing controls or measures to reduce the likelihood or impact of a risk.
* In this case, by implementing additional internal controls, management aims to mitigate the identified fraud risk.
* Definition of Other Options:
* A. Assuming the risk: This refers to accepting the risk without taking action to mitigate it. This is generally done when the risk is deemed tolerable.
* C. Avoiding the risk: This involves changing business practices or ceasing activities to eliminate the risk entirely.
* D. Transferring the risk: This occurs when the responsibility for the risk is shifted to another party, such as through insurance.
* Conclusion:The described response clearly aligns with risk mitigation, as it focuses on reducing the risk through internal control measures.
References:ACFE study materials on fraud risk assessment and management approaches.

NEW QUESTION # 194
Reputational damage is an indirect cost of fraud that can be difficult for organizations to calculate.

A. False
B. True

Answer: B

Explanation:
Indirect Costs of Fraud:
* Reputational damage is a significant indirect cost of fraud. It can lead to loss of customer trust, reduced employee morale, and long-term financial impact.
Why A is Correct:
* Quantifying reputational damage is challenging due to its intangible nature. The effects often manifest over time and are influenced by various factors, making precise calculation difficult.

NEW QUESTION # 195
Which of the following is NOT a purpose served by a professional organization s code of conduct?

A. It provides clear answers to all ethical dilemmas the organization s members might face
B. It serves as a reference and benchmark for ethical guidance
C. It facilitates practical enforcement and profession-wide internal discipline
D. It provides more direct solutions to professional ethical dilemmas than might exist under general ethical principles

Answer: B

NEW QUESTION # 196
......

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High-quality Exam CFE-Fraud-Prevention-and-Deterrence Training Offer You The Best Test Sample Online | Certified Fraud Examiner - Fraud Prevention and Deterrence Exam

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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Sample Questions (Q191-Q196):

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