The ACFE Code of Professional Ethics requires CFEs to act with integrity, competence, and professionalism.
It specifically prohibits illegal or unethical conduct, as such conduct discredits the profession and undermines public confidence in fraud examination work. A CFE may provide conclusions based on evidence, provided those conclusions are supported by relevant, reliable, and sufficient facts. A CFE may also give opinions on technical matters, such as internal controls, when qualified to do so. Conflicts of interest require careful handling and disclosure, but the most clearly and explicitly prohibited action in the options is participating in conduct that could be considered unethical. This violates the ethical foundation expected of fraud examiners and threatens the credibility of the examination. Therefore, option C is correct.

Effective Background Check Policies:
Verifying employment history involves more than just confirming dates. It includes understanding job roles, responsibilities, and performance. Solely asking for employment dates does not provide sufficient information to assess fraud risk.
Analysis of Other Options:
B). Background checks for cash-handling roles:This is critical for reducing fraud risks.
C). Background checks for promotions:This ensures that employees in sensitive positions have maintained integrity since hire.
D). Contacting references:Essential to gain insights into the candidate ' s character and reliability.
Conclusion:Option A is false because it suggests an overly simplistic approach to employment verification.
References:ACFE ' s guidance on employee screening and background checks.

ISO 31000:2018 Guidelines:
* This standard emphasizes that a risk management framework should align with the organization's size, complexity, objectives, and operations to ensure effectiveness and relevance.
Why A is Correct:
* Proportionality ensures that resources are allocated efficiently, addressing risks that directly impact the organization's goals while avoiding overcomplication.
References:
* ISO 31000:2018 risk management principles.

The Fraud Prevention Programs chapter states that management should consult legal counsel when developing the anti-fraud policy and that one of the most important legal considerations is ensuring that everyone and every allegation is handled uniformly. The manual also explains that if unacceptable conduct is not accurately detailed, the organization might face legal problems in discharging a dishonest employee. This supports including sufficiently specific descriptions or examples of prohibited conduct. For that reason, a detailed anti-fraud policy helps, rather than hinders, the organization's ability to investigate and discipline employees who commit fraud or other dishonest acts. Option C is therefore false because it reverses the manual's logic. A properly drafted and detailed anti-fraud policy strengthens enforcement and reduces legal complications.

Conducting a Fraud Risk Assessment:
Both internal and external parties can effectively conduct fraud risk assessments.
Internal teams provide organizational insight, while external parties bring objectivity and specialized expertise.
Analysis of Other Options:
B). External party only:Independence is important but not mandatory for effectiveness.
C). Belief that fraud cannot happen:This would bias the process and render the assessment ineffective.
D). Limiting management ' s influence:Management should actively participate to ensure comprehensive insights.
Conclusion:Fraud risk assessments can be effectively conducted by both internal and external parties.
References:ACFE guidance on fraud risk assessments.