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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Sample Questions:

1. Which of the following factors increases an organization's inherent inclination toward committing crime according to Diane Vaughan's research?

A) Management encourages employee loyalty through social functions.
B) Management separates employee performance goals from company performance goals.
C) Management seeks diversity in attitudes and perspectives when hiring employees.
D) Management rewards employees who challenge how the company functions.

2. Which of the following statements regarding recommended vendor due diligence procedures is MOST ACCURATE?

A) An organization should request that new vendors fill out a questionnaire about their background immediately after signing a contract with them.
B) An organization should avoid revealing that it is seeking information about potential vendors prior to starting a relationship with them.
C) An organization should subject vendors to an internal audit conducted by the organization's own auditors before agreeing to do business with them.
D) An organization should include a clause in the contract requiring the vendor to report any misconduct before entering into an agreement with them.

3. Which of the following is one of the recommendations made by the National Commission on Fraudulent Financial Reporting (the Treadway Commission) to reduce the probability of fraud in financial reports?

A) A written charter for management
B) Adequate audit committee resources and authority
C) Shareholder oversight of internal controls
D) A mandatory independent compensation committee

4. Gregory, an internal auditor, and Brandon, the company's purchasing manager, have had several heated disagreements over purchasing procedures and policies. Gregory has just been told that he will be the lead on the company's fraud risk assessment. During the fraud risk assessment.
Gregory should:

A) Include his disagreements with Brandon as a factor when assessing the risk of fraud in the purchasing function.
B) Automatically designate the purchasing function as a high-risk area.
C) Have someone else perform the fraud risk assessment work related to the purchasing function
D) Confront Brandon about the disagreements and discuss how they increase the organization's risk of fraud-

5. Julia, an internal auditor, is formalizing a process to evaluate the effectiveness of the company's control system over time, including both ongoing evaluations and periodic, separate evaluations.
Julia's initiative BEST pertains to the component of the Committee of Sponsoring Organizations of the Treadway Commission's COSO Internal Control--Integrated Framework the Framework:

A) Control activities
B) Control environment
C) Risk assessment
D) Monitoring

Solutions: