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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Sample Questions (Q57-Q62):

NEW QUESTION # 57
During an external audit of an organization's financial statements, Saskia, the external auditor, uncovers significant internal control deficiencies at the organization. She believes these deficiencies could result in a material misstatement of the financial statements. Which of the following should Saskia do regarding these findings?

• A. Saskia should withdraw from the audit engagement immediately and issue a disclaimer on any prior work performed.
• B. Saskia should suspend the current audit engagement and begin a new audit focused on the internal control deficiencies.
• C. Saskia should provide a written communication about her findings to the relevant regulatory agencies.
• D. Saskia should communicate the deficiencies in writing to those charged with governance.

Answer: D

Explanation:
External auditors are required to report significant deficiencies and material weaknesses in internal control to those charged with governance. The ACFE manual states:
"Auditors must communicate in writing to those charged with governance all significant deficiencies and material weaknesses identified during the audit." Reference: ACFE Fraud Examiners Manual, 2020 International Edition - Auditors' Fraud-Related Responsibilities, Section 4.503.

NEW QUESTION # 58
Which of the following Is TRUE regarding an organization's ethics program?

• A. All of the above
• B. In designing the ethics program, management should consider whether the organization currently has any ethical leadership Issues
• C. To be most effective, access to the organization's ethics policy should be restricted to employees and other Internal parties only
• D. An effective written ethics policy alone is sufficient to communicate management's ethical philosophy and serve as a comprehensive ethics program

Answer: B

Explanation:
* 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.

NEW QUESTION # 59
Which of the following is NOT one of the three general approaches used to control corporate crime?

• A. Voluntary changes in corporate attitudes and structure
• B. Media blacklisting of the organization
• C. Strong intervention of the government
• D. Consumer action to force change

Answer: B

NEW QUESTION # 60
Which of the following is a detective anti-fraud control?

• A. Fraud awareness training
• B. Hiring policies and procedures
• C. Separation of duties
• D. Independent reconciliations

Answer: D

Explanation:
Detective Anti-Fraud Controls:
* These controls aim to identify fraud after it has occurred. Independent reconciliations are an example of such controls because they verify transactions and accounts to detect discrepancies.
Why B is Correct:
* Independent reconciliations are specifically designed to identify errors or fraud in financial records.
Why Other Options are Incorrect:
* A, C, and D: These are preventive controls designed to reduce the likelihood of fraud occurring rather than detecting it after the fact.

NEW QUESTION # 61
Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?

• A. Management must balance the investment in anti-fraud controls with the benefit of those controls and the amount of risk it is willing to accept.
• B. Management must assign a quantitative measure to its risk appetite so that it can accurately measure the fraud risk management program's effectiveness.
• C. Management should tailor the detailed objectives of the fraud risk management program to the organization's specific needs and goals.
• D. Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented tnem.

Answer: B

NEW QUESTION # 62
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