ACFE CFE-Fraud-Prevention-and-Deterrence Exam Questions : Certified Fraud Examiner - Fraud Prevention and Deterrence Exam

Which of the following is TRUE regarding corporate governance?

• A. Fraud risk management is considered to be the foundation of effective corporate governance
• B. An entity ' s corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organization
• C. Corporate governance ' s primary purpose is to ensure the accuracy of the organization ' s financial reports
• D. Effective corporate governance practices are most necessary in an organization in which the owners are also the individuals responsible for setting the corporate strategy.

Charles, the chief executive officer (CEO) of the Baking & Things Corporation, hired Daniela, a Certified Fraud Examiner (CFE), to investigate an embezzlement case. During the investigation, Daniela learns that Charles is involved in an unrelated fraud. What action should Daniela take based on the ACFE Code of Professional Ethics?

• A. Daniela should report Charles to law enforcement.
• B. Daniela should immediately resign from the engagement.
• C. Daniela should contact the media to report what she found.
• D. Daniela should tell the company ' s board of directors about Charles.

Gray, an independent Certified Fraud Examiner (CFE), was hired by Green, president of the ABC Corporation, to investigate allegations that one of ABC ' s employees is taking kickbacks. During the investigation. Gray teams that Green is involved in an unrelated fraud. Under the ACFE Code of Professional Ethics. Gray should:

• A. Report Green to law enforcement
• B. Not disclose the information about Green.
• C. Resign from the engagement
• D. Tell the company ' s board of directors about Green.

Blue. Inc. is a specialty retailer of customized shipping containers. The company receives a very large order from Green Company, a new customer from a country that is known to have high corruption risks. Which of the following is MOST ACCURATE regarding the due diligence procedures Blue should perform on Green before proceeding with this transaction?

• A. Blue only needs to undertake due diligence procedures if Green is requesting to pay on credit.
• B. Blue should perform the same level of due diligence as it would for any other customer to avoid claims of discrimination.
• C. Blue does not need to undertake any specific due diligence procedures for this transaction.
• D. Blue should consider Green ' s expected purchasing pattern and method of payment in determining whether to accept the transaction.

Gian is a manager at Ram Co. and is tasked with building the company ' s fraud risk management program.
As a starting point, Gian wants to formally define the program ' s objectives. Which of the following is TRUE regarding the process of defining the objectives of the fraud risk management program?

• A. Gian should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented them.
• B. Gian must assign both a quantitative and qualitative measure to the company ' s risk appetite to accurately measure the program ' s effectiveness.
• C. When expressing the organization ' s risk appetite, Gian should do so without regard to the company ' s culture or operations.
• D. Gian must ensure that the company ' s investment in the fraud risk management program outweighs the benefit of those controls.