CFE - Fraud Prevention Certification Exam Questions with AI Explanations

QUESTION: 26

The internal auditor's fraud-related responsibilities include which of the following?

Obtaining reasonable assurance that the organization's financial statements are free of material misstatements caused by fraud
Overseeing management's actions to manage fraud risks
Evaluating indicators of fraud and deciding whether any further action is necessary or whether an investigation should be recommended
Establishing and maintaining effective anti-fraud controls at a reasonable cost

Answer(s): B

QUESTION: 27

According to Steve Albrecht's research,______is the most common personal characteristic motivating fraudsters, and ________ is the most common organization-environment factor motivating fraudsters.

High personal debt; lack of separation of duties
Revenge: too much trust in key employees
Living beyond their means, too much trust in key employees
Desire for recognition, lack of separation of duties

Answer(s): C

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QUESTION: 28

Which of the following is FALSE regarding a background check policy for employees?

When verifying past employment, management should only ask previous employers to verify the dates the candidate was employed.
At a minimum, management should conduct a background check on any candidate who will have constant access to cash, checks, and credit card numbers, or other easily stolen items.
Where permitted by law, management should run a background check on any existing employee who is being promoted to a position that includes access to sensitive or valuable company resources, even if a background check was run on the individual at the time of hire
As part of the screening process, management should contact the references provided by the job candidate.

Answer(s): A

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QUESTION: 29

Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?

Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented tnem.
Management must balance the investment in anti-fraud controls with the benefit of those controls and the amount of risk it is willing to accept.
Management must assign a quantitative measure to its risk appetite so that it can accurately measure the fraud risk management program's effectiveness.
Management should tailor the detailed objectives of the fraud risk management program to the organization's specific needs and goals.

Answer(s): C

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QUESTION: 30

Which of the following is an example of organizational crime?

A sales manager using a corporate credit card for personal expenses
Management of several pharmaceutical companies engaging in a price fixing scheme
An insurance claims agent conspiring with customers to file false insurance claims and share the proceeds
An HR employee adding a ghost employee to the payroll and misappropriating the paychecks

Answer(s): B

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QUESTION: 26

QUESTION: 27

QUESTION: 28

QUESTION: 29

QUESTION: 30