CFE EXAM SCRIPT FINAL PAPER FULL
QUESTIONS AND ANSWERS 2026
◉ Which of the following is TRUE regarding organizational
structure?
A. Companies with departments that are isolated geographically
have a reduced risk of fraud
B. The existence of many specialized departments within a company
generally increases the overall risk of fraud within the organization
C. Misbehavior is more likely to be detected in a complex
organizational structure than in a simple organizational structure
D. All of the above
Answer: The existence of many specialized departments within a
company generally increases the overall risk of fraud within the
organization
◉ Detective anti-fraud controls include all of the following EXCEPT:
A. Hotline
B. Proactive data analysis techniques
C. Physical inspections
, D. Hiring policies and procedures
Answer: Hiring policies and procedures
◉ According to AU Section 240, the auditor's assessment of the risk
of material misstatement due to fraud at the financial statement
level should have an effect on which of the following aspect(s) of an
audit?
A. Consideration of accounting principles used
B. Assignment and supervision of personnel
C. Choice of auditing procedures
D. All of the above
Answer: All the above
◉ The risk of the auditor not detecting a material misstatement
resulting from employee fraud is greater than the risk of the auditor
not detecting a material misstatement resulting from management
fraud.
A. True
B. False
Answer: False
QUESTIONS AND ANSWERS 2026
◉ Which of the following is TRUE regarding organizational
structure?
A. Companies with departments that are isolated geographically
have a reduced risk of fraud
B. The existence of many specialized departments within a company
generally increases the overall risk of fraud within the organization
C. Misbehavior is more likely to be detected in a complex
organizational structure than in a simple organizational structure
D. All of the above
Answer: The existence of many specialized departments within a
company generally increases the overall risk of fraud within the
organization
◉ Detective anti-fraud controls include all of the following EXCEPT:
A. Hotline
B. Proactive data analysis techniques
C. Physical inspections
, D. Hiring policies and procedures
Answer: Hiring policies and procedures
◉ According to AU Section 240, the auditor's assessment of the risk
of material misstatement due to fraud at the financial statement
level should have an effect on which of the following aspect(s) of an
audit?
A. Consideration of accounting principles used
B. Assignment and supervision of personnel
C. Choice of auditing procedures
D. All of the above
Answer: All the above
◉ The risk of the auditor not detecting a material misstatement
resulting from employee fraud is greater than the risk of the auditor
not detecting a material misstatement resulting from management
fraud.
A. True
B. False
Answer: False
