[Ethical Responsibilities of the Fraud Examiner]
Benjamin, a Certified Fraud Examiner (CFE). was contacted regarding an engagement to investigate a
complex money laundering case spanning numerous international jurisdictions and involving
multiple cutting-edge technologies. Benjamin had previously attended a seminar on investigating
money laundering schemes, but he had no other training or experience in such cases. However, he
accepted the engagement and chose to conduct the work himself. Benjamin's conduct would likely
be a violation of the ACFE Code of Professional Ethics.
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Correct Answer:
A
Q: 2
[Ethical Responsibilities of the Fraud Examiner]
Article II of the ACFE Code of Professional Ethics prohibits illegal or unethical conduct, but It allows
exceptions for unknowing violations of the law.
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Correct Answer:
B
Q: 3
[Fraud Risk Management]
According to Silk and Vogel's research, business leaders rationalize legal violations by asserting that
compliance with government regulations is too costly and cuts too heavily into company profits.
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Correct Answer:
A
Q: 4
[Ethical Responsibilities of the Fraud Examiner]
While, a Certified Fraud Examiner (CFE). was hired to conduct a fraud examination She did not find
fraud, but. In White's opinion, there were several internal control deficiencies that, if not
remediated, could facilitate the occurrence of fraud Under the ACFE Code of Professional Ethics.
White may include her opinion on the controls in her report to management.
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Correct Answer:
A
Q: 5
[Fraud Prevention]
Consistently punishing perpetrators can be an effective fraud prevention mechanism
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Correct Answer:
A
Q: 6
[Fraud Risk Management]
Having specialized departments within a company often increases the overall risk ot traud by the
organization.
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A
Q: 7
[Fraud Risk Management]
Effectively documenting and communicating organizational hierarchies, including the proper flow of
information, can be a helpful tool in preventing fraud.
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A
Q: 8
[Ethical Responsibilities of the Fraud Examiner]
Stevens, a Certified Fraud Examiner (CFE), was hired to conduct a fraud examination at ABC
Company. His examination did not reveal any conclusive evidence that fraud had occurred orwas
occurring. Consequently, ABC's management asked Stevens to state in his official examination report
that the organization is free of fraud as a means of assuring the board of directors that the company's
anti-fraud controls were effective. Under the ACFE Code of Professional Ethics. Stevens is permitted
to comply with management's request based on the findings of his examination.
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Correct Answer:
B
Q: 9
[White-Collar Crime]
Criminologist Charles McCaghy has stated that regulatory pressure is the single most compelling
factor behind deviance by organizations.
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Correct Answer:
A
Q: 10
[Fraud Deterrence]
Professional auditing standards suggest that auditors incorporate an "element of predictability" in
the selection of auditing procedures to be performed so that they ensure the same areas are tested
in the same manner during each audit.
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Correct Answer:
B
Q: 11
[Ethical Responsibilities of the Fraud Examiner]
Maria conducted a fraud examination that led to a valid confession of guilt from Rit
a. In Maria's verbal report to her superiors, she stated that, in her opinion. "Rita is guilty of
embezzlement." Maria has just violated the ACFE Code of Professional Ethics.
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Correct Answer:
A
Q: 12
[Fraud Prevention]
Formally documenting and communicating organizational hierarchies, including the proper flow of
information, can hinder an organization's fraud prevention initiatives.
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Correct Answer:
B
Q: 13
[Fraud Risk Management]
Sycamore Inc. has a simple organizational structure with few specialized departments. The structure
of Sycamore Inc. increases the likelihood that fraud will go undetected within the organization.
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Correct Answer:
A
Q: 14
[Fraud Deterrence]
In the area of criminological theory, compliance is the theory that tries to prevent crime by providing
economic incentives for voluntary conformity to the laws and using administrative efforts to control
violations before they occur.
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A
Q: 15
[Fraud Risk Management]
International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for
the establishment of anti-fraud internal controls within an organization.
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Correct Answer:
B
Q: 16
[Fraud Risk Management]
Employees should be kept unaware that management is watching for lifestyle and behavior changes
In staff members that might indicate fraud.
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Correct Answer:
B
Q: 17
[Fraud Risk Management]
For Its compliance program to be effective, an organization must perform procedures to ensure
management hires only ethical Individuals who exercise a substantial measure of discretion In acting
on the organization's behalf
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Correct Answer:
A
Q: 18
[Fraud Risk Management]
Reputational damage is an indirect cost of fraud that can be difficult for organizations to calculate.
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Correct Answer:
A
Q: 19
[Fraud Deterrence]
Susannah Is conducting an external audit of a company In a jurisdiction that is subject to
International Standards on Auditing (ISAs). While undertaking her audit procedures, she discovers
evidence that senior management has been fraudulently manipulating the financial statements.
Which of the following is Susannah's BEST response to these findings?
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Correct Answer:
C
Q: 20
[Fraud Risk Management]
During a fraud risk assessment, the assessment team determines that it would like to observe the
interactions among several employees as they collectively discuss the organization's current fraud
awareness training. Which of the following techniques would be MOST HELPFUL for the team to use
in gathering this information?
