CFE - Fraud Risk Assessment Section Questions and Answers 100% Correct

CFE - Fraud Risk Assessment Section Questions and Answers 100% Correct Under the ACFE Code of Professional Ethics, fraud examiners are strictly prohibited from accepting assignments to uncover fraud in a company in which they have a major interest. A. True B. False B (Article II of the ACFE Code of Professional Ethics states: "An ACFE Member shall not engage in any illegal or unethical conduct, or any activity which would constitute a conflict of interest that has not been properly disclosed to the appropriate parties." However, a fraud examiner does not have the same responsibilities as a chartered accountant (CA) or certified public accountant (CPA). For example, a CA or CPA generally would not be able to express an audit opinion on a company in which they held a major financial interest. In the case of the fraud examiner, they would be able to accept such an assignment under most conditions, since the goal of the fraud examiner is to gather facts regarding a potential fraud, not to express an opinion. The fraud examiner should, however, make appropriate disclosures regarding their ownership.) Which of the following is NOT one of the components of the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Enterprise Risk Management— Integrating with Strategy and Performance? A. Review and revision B. Governance and culture C. Risk tolerance D. Performance c (The Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Enterprise Risk Management—Integrating with Strategy and Performance is composed of a set of principles organized into five interrelated components and twenty supporting principles that are based on a holistic view of an organization's risk portfolio. The five components of the enterprise risk management (ERM) framework are: Governance and culture Strategy and objective-setting Performance Review and revision Information, communication, and reporting) The Committee of Sponsoring Organizations of the Treadway Commission (COSO) identified five interrelated components of _________________. A. Ethical theories B. Professional development C. Internal control D. Fraud C (The Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control—Integrated Framework (the Framework) identified five interrelated components of internal control: control environment, risk assessment, control activities, information and communication, and monitoring (CRICM). The effectiveness of internal controls can be determined from an assessment of whether (1) each of these five components is in place and functioning effectively and (2) the five components are operating together in an integrated manner.) According to criminologist Donald Cressey, which of the following is NOT essential to the commission of fraud? A. Absence of controls B. General information about how the company might be defrauded C. Technical skill D. All of the above are essential A (In Cressey's view, there were two components of the perceived opportunity to commit a trust violation: general information and technical skill. General information is simply the knowledge that the employee's position of trust could be violated. This knowledge might come from hearing of other embezzlements, from seeing dishonest behavior by other employees, or just from generally being aware of the fact that the employee is in a position where they could take advantage of their employer's faith in them. Technical skill refers to the abilities needed to commit the violation. These are usually the same abilities that the employee needs to obtain and keep their position in the first place.) The Government Accountability Office's (GAO) Yellow Book standards, also referred to as generally accepted government auditing standards (GAGAS), apply to which of the following types of engagements? A. Government financial audits B. Government review engagements C. Government performance audits D. All of the above D (The Government Accountability Office's (GAO) Yellow Book provides a framework of guidance for auditors of government entities and entities that receive government awards. Yellow Book standards cover ethics, independence, professional judgment and competence, quality control, audit performance, and reporting. The Yellow Book describes and promulgates standards for financial audits and performance audits of government organizations. It also contains standards covering attestation engagements, such as examinations and reviews, and other non-audit services performed on government organizations and programs.)