CFE-Fraud-Prevention-and-Deterrence Free Practice Test

Effectively documenting and communicating organizational hierarchies, including the proper flow of information, can be a helpful tool in preventing fraud

1. A. True
2. B. False

Correct Answer: A

Which of the following statements regarding white-collar defendants is TRUE?

1. A. The lower the offenders' social status, the more likely they are to be imprisoned
2. B. They are more likely to be fined than to face prison terms as punishment
3. C. They are less likely to insist on a trial than other offenders
4. D. All of the above

Correct Answer: B

Gray, an independent Certified Fraud Examiner (CFE). was hired by Green president of the ABC Corporation, to investigate allegations that one oi ABC s employees is taking kickbacks. During the investigation. Gray learns that Green is involved in an unrelated fraud. Under the ACFE Code of Professional Ethics. Gray should:

1. A. Tell the company's board of directors about Green
2. B. Report Green to law enforcement.
3. C. Resign from the engagement
4. D. Not disclose the information about Green.

Correct Answer: B

As part of her audit of ABC Corp . Rachel, a CPA. is identifying the risks of material misstatement due to fraud As part of this task, she should evaluate any unexpected relationships that she identified in performing analytical procedures.

1. A. True
2. B. False

Correct Answer: A

Which of the following is FALSE regarding corporate governance'

1. A. Effective corporate governance practices are most necessary in an organization in which the owners are not also the individuals responsible for setting and executing the business strategy
2. B. Effective corporate governance practices are considered to be the foundation of fraud risk management.
3. C. Corporate governances primary purpose is to ensure the accuracy of the organization's financial reports
4. D. An entity's corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organization.

Correct Answer: D