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  • Exam Name: Certified Fraud Examiner - Fraud Prevention and Deterrence Exam
  • Last Update: 26-Sep-2022
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CFE-Fraud-Prevention-and-Deterrence Questions and Answers

Question # 1

Which of the following is NOT one of the three general approaches used to control corporate crime?

A.

Withdrawal of financial institution funding

B.

Strong intervention of the government

C.

Consumer action to force change

D.

Voluntary changes in corporate attitudes and structure

Question # 2

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

A.

It replaces the need for individuals to consult their own conscience.

B.

It facilitates practical enforcement and profession-wide Internal discipline.

C.

It serves as a reference and benchmark for ethical guidance

D.

It provides more direct solutions to professional ethical dilemmas than might exist under general ethical principles

Question # 3

During an external audit, the audit team identifies evidence that management has intentionally omitted some expenses from the company's financial statements in order to conceal an asset misappropriation scheme. 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 assume that all audit evidence collected previously is unreliable and withdraw from the audit engagement

B.

The auditors should assess the need to adjust the nature, timing, and extent of remaining audit procedures based on this evidence.

C.

The auditors can ignore the misstatement because the omitted amount is less than the quantitative materiality threshold and therefore immaterial to the audit.

D.

The auditors do not need to be concerned with this evidence, as asset misappropriation schemes are not considered relevant or material for external audit purposes.

Question # 4

Professional auditing standards require that auditors incorporate an "element of unpredictability" in the selection of auditing procedures to be performed.

A.

True

B.

False

Question # 5

The findings in the 2020 Report to the Nations include which of the following?

A.

The most commonly reported red flag displayed by fraud perpetrators prior to the detection of their crime is complaints about management.

B.

Mote occupational frauds are committed by men than by women

C.

The median losses caused by executives are lower than those caused by staff-level employees

D.

The majority of fraudsters have been previously punished by an employer for a fraud-related offense

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