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Home ACFE CFE - Fraud Prevention

ACFE CFE - Fraud Prevention Exam Practice Questions (P. 1)

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Question #1
The internal auditor’s fraud-related responsibilities include which of the following?
  1. A
    Overseeing management’s actions to manage fraud risks
  2. B
    Obtaining reasonable assurance that the organization’s financial statements are free of material misstatements caused by fraud
  3. C
    Evaluating indicators of fraud and deciding whether any further action is necessary or whether an investigation should be recommended
  4. D
    Establishing and maintaining effective anti-fraud controls at a reasonable cost

Correct Answer: D ?️

Question #2
Which of the following is NOT included in G20/OECD Principles of Corporate Governance (the Principles)?
  1. A
    A call for a corporate governance framework that protects the exercise of shareholders’ rights
  2. B
    An emphasis on the importance of timely, accurate, and transparent disclosure mechanisms
  3. C
    A request that governments have in place an appropriate framework to support good corporate governance practices
  4. D
    Support for establishing stronger protection for foreign shareholders than for domestic shareholders

Correct Answer: D ?️

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?
  1. A
    The auditors should assume that all audit evidence collected previously is unreliable and withdraw from the audit engagement
  2. B
    The auditors can ignore the misstatement because the omitted amount is less than the quantitative materiality threshold and therefore immaterial to the audit
  3. C
    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
  4. D
    The auditors should assess the need to adjust the nature, timing, and extent of remaining audit procedures based on this evidence

Correct Answer: D ?️

Question #4
Which of the following is TRUE regarding the reporting of the fraud risk assessment results?
  1. A
    The fraud risk assessment report should be delivered in a style most suited to the language of the business
  2. B
    The fraud risk assessment report should contain a detailed, comprehensive list of every assessment finding
  3. C
    A fraud risk assessment report should reflect the assessment team’s subjective perspective regarding the risks identified
  4. D
    All of the above

Correct Answer: A ?️

Question #5
In identifying the inherent fraud risks that could apply to the organization, the fraud risk assessment team should discuss:
  1. A
    The organization's incentive programs
  2. B
    The possibility of management’s override of controls
  3. C
    Risks to the organization’s reputation
  4. D
    All of the above

Correct Answer: B ?️

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