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

1. Patrick is conducting an external audit of a company in a jurisdiction that is subject to International Standards on Auditing (ISAs). While undertaking his audit procedures, he discovers evidence that senior management has been fraudulently manipulating the financial statements.
Which of the following is Patrick's BEST response to these findings?

A) Patrick should confront management with his audit findings and try to get a confession.
B) Patrick should immediately report his findings to local law enforcement authorities.
C) Patrick should not disclose his findings to any other parties due to client confidentiality
D) Patrick should report his findings to those charged with governance of the organization.

2. Which of the following scenarios would MOST LIKELY be considered a violation of the ACFE Code of Professional Ethics?

A) Riva, a CFE, uncovered material internal control deficiencies that were material but unrelated to the kickback scheme she was investigating. In her final report to management, Riva included information about the deficiencies despite their being unrelated to the situation she was hired to investigate.
B) Derrick, a CFE, was hired by a client to conduct a fraud examination but found nothing abnormal.
A year later, he received a court order to provide the client's file to the court. Derrick complied with the court order despite not having the client's authorization to provide the file.
C) All of the above are violations.
D) Dee, a CFE, accepted an assignment to conduct a fraud examination within a manufacturing company. Because she rushed to complete the investigation, she overlooked key items of evidence and failed to uncover a fraud scheme.

3. Which of the following is an example of organizational crime?

A) An insurance claims agent conspiring with customers to file false insurance claims and share the proceeds
B) A sales manager using a corporate credit card for personal expenses
C) Management of several pharmaceutical companies engaging in a price fixing scheme
D) An HR employee adding a ghost employee to the payroll and misappropriating the paychecks

4. Management at ABC Corp. is assessing the company's ethical tone and how it affects the organization's fraud risk. To most effectively reinforce an anti-fraud culture, management should:

A) Use a checklist of initiatives to make sure all the elements of a strong tone at the top are in place
B) All of the above
C) implement two separate sets of ethics policies, one for management and one for employees
D) Create an environment in which employees feel safe challenging management's decisions

5. According to the 2020 Report to the Nations, which of the following is the MOST COMMON method by which frauds are detected?

A) Confession
B) Internal audit
C) Tips
D) External audit

Solutions: