Certified Fraud Examiner (CFE) set 1 from ACFE Questions & Answers Already Passed!!

According to The Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing, due professional care implies infallibility. A. True B. False - Answer-False 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 usedB. 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 The risk of an auditor not detecting a material misstatement resulting from fraud is higher than the risk of an auditor not detecting a material misstatement resulting from the error. A. True B. False - Answer-True Which of the following is/are included in the five fraud risk management principles described in the COSO/ACFE Fraud Risk Management Guide? A. Communicating the expectations of those governing the fraud risk management program B. Developing ongoing evaluations for each fraud risk management principle C. Performing comprehensive fraud risk assessments to identify specific fraud schemes D. All of the above - Answer-All of the above Which of the following is TRUE regarding fraud risks? A. The objective of anti-fraud controls is to make the inherent fraud risk significantly smaller than the residual fraud risk. B. The objective of anti-fraud controls is to make the residual fraud risk significantly smaller than the inherent fraud riskC. Risks that are present before the effect of internal controls are described as residual risks. D. The objective of anti-fraud controls is to completely eliminate residual fraud risks. - Answer-The objective of anti-fraud controls is to make the residual fraud risk significantly smaller than the inherent fraud risk As a strategy to control crime, _________ is designed to achieve conformity to the law by providing economic incentives for voluntary adherence to the law and using administrative efforts to control violations before they occur. A. Prevention B. Deterrence C. Compliance D. None of the above - Answer-Compliance In the area of criminological theory, ____________ is the theory that tries to prevent crime by using the threat of criminal sanctions. A. Punishment B. Adherence C. Deterrence D.