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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Sample Questions (Q181-Q186):

NEW QUESTION # 181
Which of the following is among the audit committee s primary responsibilities related to fraud risk management?

A. Understanding how internal and external audit strategies address fraud risk
B. Designing the fraud risk management program
C. Punishing fraud perpetrators discovered through fraud risk management activities
D. Implementing the fraud risk management program

Answer: B

NEW QUESTION # 182
Which of the following is FALSE regarding an organization's anti-fraud policy?

A. In developing the anti-fraud policy, management should check with legal counsel regarding any legal considerations with respect to the policy.
B. To avoid legal problems in discharging employees, the anti-fraud policy should not include any specific examples of frau and misconduct.
C. A detailed anti-fraud policy can make it easier to investigate and punish employees who commit fraud and other dishonest acts.
D. One of the most important considerations in developing the anti-fraud policy is to ensure every allegation is handled in a uniform manner.

Answer: B

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 # 183
Criminologist Charles McCaghy has stated that regulatory pressure is the single most compelling factor behind deviance by organizations.

A. False
B. True

Answer: A

NEW QUESTION # 184
International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the establishment of anti-fraud internal controls within an organization.

A. False
B. True

Answer: A

NEW QUESTION # 185
Which of the following is TRUE regarding International Standard on Auditing (ISA) 240?

A. ISA 240 requires auditors to effectively raise awareness about the risk of fraud within the audited organization.
B. ISA 240 establishes auditors as being primarily responsible for the prevention and detection of fraud within an organization.
C. ISA 240 creates requirements for management regarding the establishment of a holistic fraud risk management program.
D. ISA 240 establishes standards regarding the auditor's responsibility to consider fraud in an audit of financial statements.

Answer: D

Explanation:
Comprehensive and Detailed in Depth Explanation:
ISA 240 (The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements) outlines the auditor's responsibility to assess and respond to the risk of material misstatement due to fraud. It does not impose a primary responsibility for fraud prevention and detection upon auditors-that responsibility lies with management (eliminating C). The standard also does not require auditors to actively raise fraud awareness within the organization (eliminating A), nor does it establish requirements for fraud risk management programs for management (eliminating D).
Reference:Fraud Examiners Manual, 2022, Fraud Prevention and Deterrence, Auditors' Fraud-Related Responsibilities - Section 4.501.

NEW QUESTION # 186
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