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CFE-Fraud-Prevention-and-Deterrence Test Labs - CFE-Fraud-Prevention-and-Deterrence Reliable Test Experience

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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Exam Sample Questions (Q163-Q168):

NEW QUESTION # 163
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. Have adequate compensation committee resources and authority
B. Have a mandatory independent audit committee
C. Give shareholders oversight of hotline reporting programs
D. Develop a written charter for management

Answer: B

NEW QUESTION # 164
A government auditor is conducting a financial statement audit of a public-sector entity in accordance with the International Standards of Supreme Audit Institutions (ISSAI). Which of the following is TRUE regarding the auditor's consideration of fraud during this engagement?

A. In addition to fraud, the auditor should remain alert to potential occurrences of abuse during the audit.
B. The requirements found in International Standard on Auditing (ISA) 240 do not apply to the engagement
C. The auditor has the automatic ability to withdraw from the audit engagement if fraud is found.
D. The objectives of the audit are likely narrower than those of a private-sector financial statement audit.

Answer: A

NEW QUESTION # 165
During an external audit, the audit team identifies evidence that management has Intentionally manipulated the organization's reported revenue amount 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 regard the misstatement as immatenal to the audit because the omitted amount is less than the quantitative materiality threshold
C. The auditors should reconsider the reliability of the audit evidence they have previously obtained.
D. The auditors should only consider the evidence if they can determine that the actions meet the legal definition of fraud.

Answer: B

NEW QUESTION # 166
According to ACFE research, the most common method for detecting occupational fraud is:

A. Management review
B. Tips
C. External audit
D. Internal audit

Answer: B

Explanation:
ACFE research consistently shows that tips are the most common method for detecting occupational fraud.
Organizations often rely on whistleblowing mechanisms such as hotlines to encourage employees and other stakeholders to report suspected fraud, which makes tips the most effective fraud detection tool.

NEW QUESTION # 167
Employees should be kept unaware that management is watching for lifestyle and behavior changes In staff members that might indicate fraud.

A. False
B. True

Answer: A

Explanation:
Management's Role in Fraud Monitoring:
Employees should be aware that management monitors lifestyle and behavior changes. Transparency discourages fraudulent behavior by reinforcing accountability.
Effect of Transparency:
Awareness of monitoring helps maintain a culture of ethical behavior and reduces the likelihood of fraud.
Conclusion:The statement is false because employees should know that management is vigilant about potential fraud indicators.
References:ACFE guidance on fraud prevention and monitoring.

NEW QUESTION # 168
......

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