Online Access Free CFE-Fraud-Prevention Exam Questions

In response to a risk identified during a fraud risk assessment, management decides to implement additional internal control measures. This response is known as:

• A.Mitigating the risk
• B.Transferring the risk
• C.Avoiding the risk
• D.Assuming the risk

During an external audit, the audit team identifies evidence that management has Intentionally manipulated the organization's reported revenue amount However, the amount of the resulting misstatement does not meet the quantitative materiality threshold for the audit. Which of the following is TRUE regarding this situation?

• A.The auditors should only consider the evidence if they can determine that the actions meet the legal definition of fraud.
• B.The auditors should regard the misstatement as immatenal to the audit because the omitted amount is less than the quantitative materiality threshold
• C.The auditors should reconsider the reliability of the audit evidence they have previously obtained.
• D.The auditors should assume that all audit evidence collected previously is unreliable and withdraw from the audit engagement.

During a fraud risk assessment, a manager argues that fraud risks should only be evaluated based on historical fraud incidents. What is the BEST response?

• A.Exclude hypothetical fraud scenarios
• B.Focus exclusively on areas with prior losses
• C.Agree because past fraud is the strongest predictor of future fraud
• D.Evaluate both existing and potential fraud risks, including risks not previously observed

Who is ultimately responsible for responding appropriately to instances of fraud within an organization?

• A.Management
• B.Internal auditors
• C.The audit committee
• D.General counsel

Which of the following is NOT a purpose served by a professional organization's code of conduct?

• A.It serves as a reference and benchmark for ethical guidance
• B.It facilitates practical enforcement and profession-wide Internal discipline.
• C.It replaces the need for individuals to consult their own conscience.
• D.It provides more direct solutions to professional ethical dilemmas than might exist under general ethical principles