CFE - Fraud Prevention

CFE - Fraud Prevention practice questions, page 5 of 11, with answer review and explanations.

Question 21

Reputational damage is an indirect cost of fraud that can be difficult for organizations to calculate.

  1. True
  2. False

Question 22

International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the prevention and detection of fraud within an organization.

  1. True
  2. False

Question 23

Fraud risks related to regulatory and legal misconduct include all of the following EXCEPT:

  1. Anti-competitive practices
  2. Fraudulent customer payments
  3. Insider trading
  4. Conflicts of interest

Question 24

Benjamin, a Certified Fraud Examiner (CFE), was contacted regarding an engagement to investigate a complex money laundering case spanning numerous international jurisdictions and involving multiple cutting-edge technologies. Benjamin had previously attended a seminar on investigating money laundering schemes, but he had no other training or experience in such cases. However, he accepted the engagement and chose to conduct the work himself. Benjamin’s conduct would likely be a violation of the ACFE Code of Professional Ethics.

  1. True
  2. False

Question 25

Which of the following is FALSE regarding a fraud risk assessment?

  1. The objective of the assessment is to provide an estimate of the organization’s fraud losses
  2. The designation of an area as being high risk does not conclusively mean that fraud is occurring there
  3. The assessment should be used to improve employee fraud awareness
  4. The assessment team should consider how employees behave as part of its assessment