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

nti-Fraud Policy Components:

A robust anti-fraud policy should provide clear definitions and examples of fraud and misconduct to ensure employees understand what constitutes unacceptable behavior.

Specific examples make investigations and enforcement more consistent and defensible.

Analysis of Option B:

Avoiding specific examples creates ambiguity, which can hinder enforcement and increase legal risks when discharging employees.

Properly vetted examples, reviewed with legal counsel, help ensure compliance with legal standards.

Conclusion:Option B is false because including examples of fraud and misconduct strengthens the anti-fraud policy.

Implications of Management Manipulation:

Intentional manipulation, even if quantitatively immaterial, raises concerns about the reliability of management representations and the integrity of audit evidence.

Why Option A is Correct:

Reassessing the reliability of previously obtained evidence ensures that the auditors address potential biases or systemic issues arising from management's actions.

Analysis of Other Options:

B. Withdrawing from the audit:Premature unless the issue is pervasive.

C. Legal definition of fraud:Auditors are not required to meet this threshold for assessing evidence.

D. Quantitative materiality:Misstatements can be qualitatively material if they indicate intentional manipulation.

Conclusion:The auditors must reconsider the reliability of evidence due to the qualitative implications of management's actions.

Rationalization in the Fraud Triangle:

Rationalization refers to the justification an individual uses to make fraudulent behavior acceptable in their mind.

In this case, Jody justifies his theft by believing the company owes him for his loyalty and hard work.

Why B is Correct:

Jody’s reasoning aligns with the rationalization leg of the fraud triangle, as he convinces himself his actions are justified.

Why Other Options are Incorrect:

A (Perceived non-shareable financial need):Involves financial pressure, not justification.

C (Perceived opportunity):Refers to the ability to commit fraud.

D (Lack of personal integrity):Reflects a broader ethical deficiency, not a specific rationalization​​.

Rational Choice Theory Overview:

This theory asserts that individuals make conscious decisions to commit crimes after weighing the costs (risk of detection and punishment) and benefits.

Why D is Correct:

Rational choice theory aligns with strategies to deter crime by reducing opportunities and increasing personal risks.

Why Other Options are Incorrect:

A (Differential association theory):Explains crime as learned behavior.

B (Routine activities theory):Focuses on environmental factors.

C (Justification of action theory):Not a recognized criminological theory​​.

References for All Questions:

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

Criminological theories and governance frameworks in fraud prevention​​.

Case studies on indirect fraud costs and ethical decision-making​​.

Detective controls are designed to identify fraud or errors that have already occurred. Continuous audit techniques serve as a detective control by automatically monitoring transactions and flagging anomalies or irregularities for further investigation. On the other hand, preventive controls such as separation of duties, background checks, and hiring policies aim to stop fraud before it happens.

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