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NEW QUESTION 39
The theory of differential association is used frequently to explain white-collar criminality Which of the following is NOT one of the assertions or principles of differential association?
- A. Criminal behavior is acquired through participation with intimate personal groups
- B. Criminal behavior is learned using the same mechanisms as other learning
- C. The process of learning criminal behavior Is the same as pure imitation
- D. Criminal behavior is learned from other people in a process of communication
Answer: A
NEW QUESTION 40
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. Serving as the middlemen between shareholders and management
- C. Managing the performance of employees charged with carrying out business activities
- D. Acting as guardians of the organization s resources and assets
Answer: B
NEW QUESTION 41
According to the 2018 Report to the Nations, which of the following is the most common method by which frauds are detected?
- A. Confession
- B. Tips
- C. Internal audit
- D. External audit
Answer: B
NEW QUESTION 42
Professional auditing standards suggest that auditors incorporate an "element of predictability" in the selection of auditing procedures to be performed so that they ensure the same areas are tested in the same manner during each audit.
- A. True
- B. False
Answer: A
NEW QUESTION 43
International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the prevention and detection of fraud within an organization
- A. False
- B. True
Answer: A
NEW QUESTION 44
According to the differential reinforcement theory, behavior is weakened when positive rewards are gained or punishment is avoided
- A. True
- B. False
Answer: A
NEW QUESTION 45
Which of the following statements about the fraud risk assessment process is MOST ACCURATE"?
- A. The fraud risk assessment is most effective when management s influence on the process is limited.
- B. If the individuals conducting the fraud risk assessment truly believe that fraud could not happen at the organization the assessment process should reflect that belief.
- C. The assessment team must be perceived as independent and objective by others for the assessment to be effective
- D. To ensure the independence of the team members a fraud risk assessment must be conducted by a consultant or other external party.
Answer: D
NEW QUESTION 46
Which of the following is FALSE regarding the discussion about the financial statements susceptibility to fraud that auditors are required to have under International Standard on Auditing (ISA) 240?
- A. The audit team should focus solely on how the company's assets could be misappropriated
- B. A The audit team should discuss how management could conceal fraud
- C. The audit team should consider whether the organizational culture might enable the rationalization of fraud
- D. The audit team should consider factors that provide the opportunity for fraud.
Answer: C
NEW QUESTION 47
The Public Interest Oversight Board (PIOB) is the global body responsible for establishing international corporate governance standards.
- A. False
- B. True
Answer: A
NEW QUESTION 48
Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?
- A. Management should express risk appetite in a manner that is appropriate for and unique to the organization s culture and operations.
- B. Management must assign a quantitative measure to its risk appetite so that it can accurately measure the fraud risk management program s effectiveness
- C. Management must consider the total amount of fraud risk it is willing to accept when determining fraud risk management objectives
- D. Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented them.
Answer: C
NEW QUESTION 49
According to the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control-Integrated Framework (the Framework), there are five interrelated components of a company's internal control. Which of the following is NOT among these five components?
- A. Control activities
- B. Monitoring
- C. Ethical culture
- D. Risk assessment
Answer: C
NEW QUESTION 50
During a fraud risk assessment, (he assessment (earn 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. Focus groups
- B. Anonymous feedback mechanisms
- C. Interviews
- D. Surveys
Answer: B
NEW QUESTION 51
Which of the following is FALSE regarding a background check policy for employees'7
- A. When verifying past employment, management should only ask previous employers to verify the dates the candidate was employed.
- B. Where permitted by law. management should run a background check on any existing employee who is being promoted to a position that includes access to sensitive or valuable company resources, even if a background check was run on the individual at the time of hire
- C. As part of the screening process, management should contact the references provided by the job candidate
- D. At a minimum, management should conduct a background check on any candidate who will have constant access to cash, checks, and credit card numbers, or other easily stolen items.
Answer: A
NEW QUESTION 52
The existence of many specialized departments within a company generally decreases the overall risk of fraud within the organization
- A. True
- B. False
Answer: A
NEW QUESTION 53
Which of the following is one of the components of the Committee of Sponsoring Organizations of the Treactway Commission's (COSO) Enterprise Risk Management-Integrating with Strategy and Performance?
- A. Risk tolerance
- B. Review and revision
- C. Compliance
- D. Event avoidance
Answer: A
NEW QUESTION 54
To be in compliance with the ACFE Code of Professional Ethics, fraud examiners must have:
- A. A Sufficient skill and knowledge to recognize when additional training or expert guidance is required
- B. An expert level of knowledge for every circumstance that might be encountered in a fraud examination
- C. An expert level of experience for every circumstance that might be encountered in a fraud examination
- D. Sufficient resources to obtain the training needed to become an expert on all facets of fraud examinations
Answer: D
NEW QUESTION 55
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. Not agree to the request for confidentiality
- B. Tell Stefan that he will try to keep the information as confidential as possible
- C. Agree that the information will be held in confidence, even though Marten knows it will not be
- D. Take Stefan's request straight to Acme Inc.'s management
Answer: B
NEW QUESTION 56
Which of the following is among the audit committee s primary responsibilities related to fraud risk management?
- A. Designing the fraud risk management program
- B. Implementing the fraud risk management program
- C. Punishing fraud perpetrators discovered through fraud risk management activities
- D. Understanding how internal and external audit strategies address fraud risk
Answer: A
NEW QUESTION 57
Which of the following statements regarding document retention policies (DRPs) is TRUE?
- A. When establishing a document retention policy, management should consider any industry-specific rules for documenting and regaining records
- B. All of the above
- C. Document retention policies do not need to include protocols for preserving electronic documents as most IT systems automatically preserve copies of such data
- D. An effective document retention policy permits the organization to continue the destruction of documents when faced with potential litigation
Answer: B
NEW QUESTION 58
A report by a fraud examiner is privileged from disclosure by anyone other than the client
- A. True
- B. False
Answer: A
NEW QUESTION 59
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: A
NEW QUESTION 60
Which of the following is NOT considered a conflict of interest that is prohibited under the ACFE Code of Professional Ethics? )
- A. Undertaking engagements for both sides in a case of an alleged product substitution scheme
- B. Accepting an assignment to assess red flags of fraud at an organization in which the fraud examiner is a partner, provided the fraud examiner's ownership interest is disclosed
- C. Undertaking an engagement that decreases the fraud examiner's ability to perform their duties for their full-time employer
- D. Accepting an assignment to secretly infiltrate the fraud examiner s employing organization and transmit inside information to another party
Answer: A
NEW QUESTION 61
Which of the following is NOT included in the five fraud risk management principles described
- A. Deploying preventive and detective fraud control activities to mitigate fraud risk
- B. Performing comprehensive fraud risk assessments to identify specific fraud schemes
- C. Communicating the expectations of those governing the fraud risk management program
- D. Developing one-time evaluations for each fraud risk management principle
Answer: D
NEW QUESTION 62
In the context of fraud examination, integrity requires all of the following EXCEPT:
- A. An ability to analyze situations where no professional rules are specifically applicable and determine right from wrong
- B. Avoidance of differences of opinion
- C. Independence of mental attitude
- D. Subordination of desires for personal gain to the interests of clients, employers, and the public
Answer: B
NEW QUESTION 63
The generation and use of relevant, quality information to support the functioning of internal control is a principle related to which component of the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) Internal Control-Integrated Framework (the Framework)?
- A. Risk assessment
- B. Information and communication
- C. Monitoring
- D. Control environment
Answer: A
NEW QUESTION 64
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