ACFE CFE-Fraud-Prevention-and-Deterrence Practice Questions| TestInsights

Question 1

Which of the following Is one of the recommendations made by the National Commission on Fraudulent Financial Reporting (the Treadway Commission) to reduce the probability of fraud in financial reports?

AGive shareholders oversight of hotline reporting programs

BHave adequate compensation committee resources and authority

CDevelop a written charter for management

DHave a mandatory independent audit committee

Correct : D

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AGive shareholders oversight of hotline reporting programs

BHave adequate compensation committee resources and authority

CDevelop a written charter for management

DHave a mandatory independent audit committee

Question 2

Which principle of corporate governance pertains to the disclosure of all material matters that the shareholders need to make timely and informed decisions regarding their investment in the company?

ATransparency

BFairness

CResponsibility

DAccountability

Correct : A

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ATransparency

BFairness

CResponsibility

DAccountability

Question 3

Which of the following statements is FALSE regarding an organization's fraud risk management program?

AThe program must include mechanisms to monitor and identify breaches in compliance.

BThe responsibility of handling suspected incidents of noncompliance should be delegated to someone outside of the company.

CFormal sanctions for intentional noncompliance should be well-publicized throughout the company

DThere should be measures in place to address failures in the design or operation of anti-fraud controls, as well as fraud occurrences

Correct : B

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AThe program must include mechanisms to monitor and identify breaches in compliance.

BThe responsibility of handling suspected incidents of noncompliance should be delegated to someone outside of the company.

CFormal sanctions for intentional noncompliance should be well-publicized throughout the company

DThere should be measures in place to address failures in the design or operation of anti-fraud controls, as well as fraud occurrences

Question 4

Consistently punishing perpetrators can be an effective fraud prevention mechanism

ATrue

BFalse

Correct : A

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ATrue

BFalse

Question 5

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.

ATrue

BFalse

Correct : B

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ATrue

BFalse

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