CFE-Fraud-Prevention-and-Deterrence Exam Dumps - ACFE Certified Fraud Examiner Questions and Answers

Ethical Obligations Under ACFE Code:

CFEs are obligated to report material findings, including deficiencies that may facilitate fraud, even if no fraud is found.

Providing such insights aligns with the principles of due diligence and professional responsibility.

Professional Reporting Practices:

Including opinions on internal control deficiencies adds value to the examination and supports fraud prevention efforts.

Conclusion:White may include her opinion on control deficiencies in her report.

Comprehensive and Detailed in Depth Explanation:

The COSO framework outlines monitoring as one of its five core components, which involves evaluating the effectiveness of internal controls over time. Monitoring includes both ongoing evaluations and separate evaluations, which is exactly what Julia is initiating. This distinguishes monitoring (correct) from control activities (which pertain to execution of policies), risk assessment (which identifies and analyzes risks), and control environment (which is the tone at the top).

Fraud Risk Assessment Objectivity:

The assessment must remain unbiased, but any prior disagreements or conflicts may highlight areas where policies or procedures are unclear, increasing fraud risks.

Why C is Correct:

Incorporating disagreements provides context to evaluate risks objectively, ensuring that all relevant factors are considered without bias.

Why Other Options are Incorrect:

A:Confronting Brandon could create further conflict without adding value.

B:Delegating the task unnecessarily avoids responsibility.

D:Automatically designating the area as high-risk lacks justification and could undermine credibility​​.

References for All Questions:

ACFE Code of Professional Ethics and Fraud Examination Guide​​.

ISO 31000:2018 guidelines for risk management​​.

Criminological theories related to crime causation and fraud risk assessments​​.

Corporate Governance in Multinational Corporations:

Multinational corporations must adhere to the legal, regulatory, and governance frameworks of each jurisdiction in which they operate. These frameworks may vary significantly across countries.

Why Other Options are Incorrect:

B:There is no Universal Corporate Governance Act applicable globally.

C:G20/OECD Principles provide guidelines but are not mandatory compliance requirements.

D:Operating in multiple jurisdictions increases governance complexity, but does not exempt corporations from compliance.

Why A is Correct:

It reflects the reality of multinational operations, where governance compliance must align with local laws and regulations​​.

References for All Questions:

ACFE and Treadway Commission fraud prevention guidelines​​.

ISSAI standards and international governance principles​​.

COSO framework and legal requirements for multinational corporations​​.

General Approaches to Control Corporate Crime:

Common approaches include government intervention, consumer action, and voluntary corporate changes.

Financial institution funding is not typically listed as a direct control mechanism for corporate crime.

Analysis of Options:

B. Government intervention:Effective through regulation and enforcement.

C. Consumer action:Encourages ethical practices through market pressures.

D. Voluntary corporate changes:Demonstrates internal commitment to compliance.

Conclusion:Withdrawal of financial institution funding is not one of the recognized general approaches.

 Purpose of Fraud Risk Assessment:

Fraud risk assessment aims to identify vulnerabilities and evaluate the organization's exposure to fraud risks. It does not specifically provide an estimate of fraud losses.

 Why D is Correct:

Estimating fraud losses is not a standard objective of fraud risk assessments; rather, they focus on identifying and mitigating risks.

 Why Other Options are Correct:

A: Employee behavior is a critical factor in fraud risk.

B: Fraud awareness is a key outcome of the assessment.

C: High-risk designations indicate vulnerability, not confirmed fraud​​.

Key Elements of an Ethics Program:

An effective ethics program involves assessing existing issues, such as ethical leadership gaps, and designing policies and practices to address them.

Analysis of Other Options:

A. Restricted access:Ethics policies should be accessible to external parties, including stakeholders, to enhance transparency.

C. Written policy alone:A written policy is insufficient without ongoing communication, training, and leadership support.

D. All of the above:Incorrect because options A and C are not true.

Conclusion:Considering existing ethical leadership issues is critical when designing an effective ethics program.

Findings from the 2020 Report to the Nations:

A. Complaints about management:Not the most common red flag; lifestyle changes, such as living beyond means, are more common.

B. Gender of fraudsters:The report consistently shows that men commit more occupational frauds than women.

C. Median losses by executives vs. staff:Losses caused by executives are significantly higher.

D. Past offenses:Most fraudsters do not have a prior fraud-related disciplinary history.

Conclusion:Option B aligns with the findings of the 2020 Report to the Nations.