CERTIFIED FRAUD EXAMINER (CFE) SET 1 FROM
ACFE WITH ALL CORRECT & 100% VERIFIED
ANSWERS|UPDATED TO PASS
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 ✔Correct 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 ✔Correct 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 ✔Correct 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 ✔Correct 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 ✔Correct 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 ✔Correct 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 ✔Correct 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 risk
C. 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. ✔Correct 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 ✔Correct 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. None of the above ✔Correct Answer--Deterrence
According to Reiss and Biderman, _____________________ violations are those violations of law . . . that involve the
use of a violator's position of economic power, influence, or trust in the legitimate economic or political
institutional order for the purpose of illegal gain, or to commit an illegal act for personal or organizational gain.
A. Violent crime
B. Organized crime
C. Environmental crime
D. White-collar crime ✔Correct Answer--White-collar crime
Under the ACFE Code of Professional Ethics, fraud examiners are strictly prohibited from expressing opinions on
technical matters.
A. True
B. False ✔Correct Answer--False
In the area of criminological theory, ____________ is the theory that tries to prevent crime by using the threat of
criminal sanctions.
A. Deterrence
B. Punishment
C. Adherence
D. None of the above ✔Correct Answer--Deterrence
ACFE WITH ALL CORRECT & 100% VERIFIED
ANSWERS|UPDATED TO PASS
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 ✔Correct 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 ✔Correct 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 ✔Correct 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 ✔Correct 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 ✔Correct 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 ✔Correct 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 ✔Correct 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 risk
C. 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. ✔Correct 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 ✔Correct 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. None of the above ✔Correct Answer--Deterrence
According to Reiss and Biderman, _____________________ violations are those violations of law . . . that involve the
use of a violator's position of economic power, influence, or trust in the legitimate economic or political
institutional order for the purpose of illegal gain, or to commit an illegal act for personal or organizational gain.
A. Violent crime
B. Organized crime
C. Environmental crime
D. White-collar crime ✔Correct Answer--White-collar crime
Under the ACFE Code of Professional Ethics, fraud examiners are strictly prohibited from expressing opinions on
technical matters.
A. True
B. False ✔Correct Answer--False
In the area of criminological theory, ____________ is the theory that tries to prevent crime by using the threat of
criminal sanctions.
A. Deterrence
B. Punishment
C. Adherence
D. None of the above ✔Correct Answer--Deterrence
