Certified Fraud Examiner - Fraud Prevention and Deterrence Exam (CFE-Fraud-Prevention-and-Deterrence) Free Practice Test

Question 1

The differential reinforcement theory asserts that behavior is strengthened when ________ is/are applied.

A. Negative stimuli

B. Repeated warnings

C. Punishment

D. Positive reinforcement

Correct Answer: D

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Question 2

Which of the following Is FALSE regarding proactive fraud auditing procedures?

A. Fraud assessment questioning techniques are most appropriately used as part of the normal audit process

B. Implementing proactive fraud audit procedures demonstrates management ' s intention to aggressively look for possible fraudulent conduct

C. Analytical review of the financial statements is best used to uncover small frauds that might be missed by other detection methods

D. Fraud audit procedures should be designed to incorporate an element of surprise

Correct Answer: C

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Question 3

(Cedric is an internal auditor with XYZ Company. Cedric's supervisor, James, is the chief audit executive (CAE) and the fraud risk assessment sponsor. James has tasked Cedric with drafting an email communication regarding XYZ's upcoming fraud risk assessment process. Which of the following is a best practice that Cedric should implement?)

A. Cedric should send a generic communication to the entire staff.

B. Cedric's communication should be vague to avoid giving away specifics about the fraud risk assessment process.

C. Cedric should keep the communication private and share it only with XYZ's board of directors.

D. Cedric's communication should be sent from James's email address.

Correct Answer: D

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Question 4

Po, a Certified Fraud Examiner (CFE), was hired to conduct a fraud examination. She did not find fraud, but in Po ' s opinion, there were several internal control deficiencies that, if not corrected, could facilitate the occurrence of fraud. Under the ACFE Code of Professional Ethics, which of the following is TRUE?

A. Po may include her opinion on the internal controls in her report to management only if management agrees to compensate her for the addition.

B. Po may include her opinion on the internal controls in her report to management because it is a technical matter.

C. Po may not include her opinion on the internal controls in her report to management because that is not what she was hired to assess.

D. Po may include her opinion on the internal controls in her report to management only if she amends her contract.

Correct Answer: B

Question 5

Which of the following is TRUE regarding International Standard on Auditing (ISA) 240?

A. ISA 240 establishes auditors as being primarily responsible for the prevention and detection of fraud within an organization.

B. ISA 240 creates requirements for management regarding the establishment of a holistic fraud risk management program.

C. ISA 240 requires auditors to effectively raise awareness about the risk of fraud within the audited organization.

D. ISA 240 establishes standards regarding the auditor ' s responsibility to consider fraud in an audit of financial statements.

Correct Answer: D

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Question 6

Jones, an accounting manager for a software company, wants to improve her team ' s adherence to the company ' s formal accounting policies and procedures and reduce the number of process exceptions they experience. According to behaviorist theories, which of the following options would be the most effective way for Jones to condition her staff to follow the company ' s formal accounting processes?

A. Publicly call out and criticize employees who deviate from the formal processes.

B. Offer a bonus to anyone who experiences no process exceptions for ninety days-

C. Demote employees who do not adhere to the expected processes.

D. Take away a day of paid time off for each process exception.

Correct Answer: B

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Question 7

(During a fraud risk assessment, an interview would be MOST HELPFUL in which of the following situations?)

A. The assessment team would like to obtain individuals' responses through a formal electronic questionnaire.

B. The assessment team would like to observe the interactions of several employees discussing the organization's current fraud awareness training.

C. The assessment team would like to provide a means for anonymous employee suggestions or responses to questions posed.

D. The assessment team would like to get candid one-on-one feedback from employees in a private setting.

Correct Answer: D

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Question 8

As part of its anti-fraud program, Elm Company is outlining the responsibilities of different stakeholders.
Who is ultimately responsible for ensuring the effectiveness of the organization ' s anti-fraud program?

A. Management

B. Internal auditors

C. The compliance function

D. Forensic accountants

Correct Answer: A

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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence (CFE-Fraud-Prevention-and-Deterrence) Free Practice Test