(2025) PASS CFE-Fraud-Prevention-and-Deterrence exam with ACFE CFE-Fraud-Prevention-and-Deterrence Real Exam Questions [Q25-Q49]

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(2025) PASS CFE-Fraud-Prevention-and-Deterrence exam with ACFE CFE-Fraud-Prevention-and-Deterrence Real Exam Questions

Real exam questions are provided for Certified Fraud Examiner tests, which can make sure you 100% pass

The Certified Fraud Examiner (CFE) – Fraud Prevention and Deterrence is an exam offered by the Association of Certified Fraud Examiners (ACFE). CFE-Fraud-Prevention-and-Deterrence exam is designed to test the knowledge and skills of professionals who are involved in the prevention and detection of fraud. The CFE-Fraud Prevention and Deterrence exam covers a wide range of topics related to fraud, including fraud prevention, detection, investigation, and deterrence.

NO.25 According to the authors of Crimes of the Middle Classes, all of the following factors have contributed to the rising problem of economic crime EXCEPT:

The continued pressures of a culture that rewards affluence and success

The economy’s increased reliance on credit

The increased constraints of the regulatory environment for businesses

The increased opportunity for wrongdoing as a result of advancing information technologies

NO.26 Based on research regarding the criminogenic nature of organizations, employees with strong personal values and ethics will always disobey a superior’s direct order to engage in fraudulent behavior, despite an inherent desire to obey authority figures.

True

Flase

NO.27 The objectives of a fraud risk management program include:

Proactively identifying fraud risks

Limiting the damage caused by fraud occurrences

Punishing fraud perpetrators

All of the above

NO.28 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

NO.29 Which of the following is one of the components of the Committee of Sponsoring Organizations of the Treadway Commission’s (COSO) Enterprise Risk Management-Integrating with Strategy and Performance?

Event avoidance

Risk tolerance

Compliance

Review and revision

NO.30 Which of the following best describes the purpose of The National Commission on Fraudulent Financial Reporting (the Treadway Commission)?

Studying the effect of the threat of vicarious liability on the behavior of corporate executives

Designing a model corporate compliance program

Defining the responsibility of the auditor in preventing and detecting fraud

Determining the specific requirements of the Principles of Risk Management

NO.31 Rhys, a Certified Fraud Examiner (CFE), was hired to conduct a fraud examination at Marvel Company. His examination did not reveal any conclusive evidence that fraud had occurred or was occurring. Consequently, Marvel’s management asked Rhys to state in his official examination report that the company is free of fraud as a means of assuring the board of directors that the company’s anti-fraud controls were effective. Which of the following is TRUE regarding the ACFE Code of Professional Ethics in this situation?

The ACFE Code of Professional Ethics allows Rhys to comply with management’s request without limitations.

The ACFE Code of Professional Ethics allows Rhys to comply with management’s request only if he can find another CFE to co-sign his report.

The ACFE Code of Professional Ethics allows Rhys to comply with management’s request only if the company has liability insurance to cover an incorrect assertion.

The ACFE Code of Professional Ethics absolutely prohibits Rhys from complying with management’s request.

NO.32 Which of the following statements is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?

Professional skepticism means beginning all assignments with the belief that something is amiss.

Professional skepticism involves maintaining a mindset that no fraud has occurred

Fraud examiners should form the engagement hypothesis without regard to the available preliminary information.

Fraud examiners should not relax their skeptical attitudes under any circumstances.

NO.33 Which of the following is included in the G20/OECD Principles of Corporate Governance?

A requirement for a corporate governance framework that protects the exercise of management’s rights.

Support for the equal treatment of all members of an organization’s governing body.

A request that governments implement effective internal controls to support good corporate governance practices.

An emphasis on the importance of timely, accurate and transparent disclosure mechanisms.

NO.34 Which of the following Is NOT a way that an organization’s fraud risk assessment should be Incorporated Into the audit process?

It should be used to assess whether there is a moderate-to-high risk of management overriding controls within the moderate-to-high fraud risk areas.

It should be used to replace the auditor’s own identification and assessment of fraud risks.

it should be used to increase awareness in the development of audit programs for areas that have been identified as having a moderate-to-high risk of fraud.

It should be used to design audit tests to evaluate whether the controls are operating effectively.

NO.35 During a fraud risk assessment, the assessment team is seeking information on the ethical tone set by upper and middle managers. The team members determine that, for this task, they would like to get candid one-on- one feedback from employees away from their peers. Which of the following techniques would be most helpful for them to use in gathering this information?

Interviews

Focus groups

Anonymous feedback mechanisms

Surveys

NO.36 Maria conducted a fraud examination that led to a valid confession of guilt from Rit a. In Maria’s verbal report to her superiors, she stated that, in her opinion. “Rita is guilty of embezzlement.” Maria has just violated the ACFE Code of Professional Ethics.

True

False

NO.37 Which of the following choices is an example of an anti-fraud control that is primarily detective in nature?

Continuous audit techniques

Separation of employee duties

Employee background checks

Hiring policies and procedures

NO.38 Which of the following statements is FALSE?

Controls are not effective in preventing theft and fraud If those at risk do not know of their presence

Most experts agree that it is harder to detect frauds than to prevent them

Educating employees about company hotlines and reporting programs increases their perception of detection

Conducting covert audits is among the most effective fraud prevention methods

NO.39 The Committee of Sponsoring Organizations of the Treadway Commission (COSO) defines internal control as:

A process implemented to review how well the organization’s risk management capabilities have increased value over time and how they will continue to drive value for the organization

A process, effected by an entity’s board of directors, management, and other personnel,designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance

A process involving personnel at all levels of the organization that aims to eliminate all uncertainty and risk while also ensuring the achievement of organizational goals

A process aimed at proactively identifying, evaluating, and addressing an organization’s vulnerabilities to fraud by both internal and external sources

NO.40 According to modern criminological studies, which of the following is the determinant aspect of white-collar crime?

Cultural ties

Criminal history

Organizational opportunity

Social class

NO.41 Which of the following is an example of organizational crime?

doctor conspiring with patients to file false health care insurance claims

A salesman offering bribes to secure a contract

An accounting clerk forging company checks to herself

Management of several construction companies engaging in bid rigging

NO.42 Which of the following is FALSE regarding an organization’s anti-fraud policy?

A detailed anti-fraud policy can make it easier to investigate and punish employees who commit fraud and other dishonest acts.

To avoid legal problems in discharging employees, the anti-fraud policy should not include any specific examples of frau and misconduct.

In developing the anti-fraud policy, management should check with legal counsel regarding any legal considerations with respect to the policy.

One of the most important considerations in developing the anti-fraud policy is to ensure every allegation is handled in a uniform manner.

NO.43 A government auditor is conducting a financial statement audit of a public-sector entity in accordance with the International Standards of Supreme Audit Institutions (ISSAI). Which of the following is TRUE regarding the auditor’s consideration of fraud during this engagement?

In addition to fraud, the auditor should remain alert to potential occurrences of abuse during the audit.

The auditor has the automatic ability to withdraw from the audit engagement if fraud is found.

The requirements found in International Standard on Auditing (ISA) 240 do not apply to the engagement

The objectives of the audit are likely narrower than those of a private-sector financial statement audit.

NO.44 During the course of a fraud examination. While, an employee of the ABC Corp.. approaches Blue, a Certified Fraud Examiner (CFE), and tells Blue that she wishes to furnish information in confidence. Blue also is employed by the ABC Corp. Blue should:

Tell White that she will try to keep the information as confidential as possible

Agree that the information will be held in confidence, even though Blue knows it will not be

Take White’s request straight to ABC Corp.’s management

Not agree to the request for confidentiality

NO.45 Daniela, an independent Certified Fraud Examiner (CFE), was hired by Charles, executive director of a nonprofit organization, to investigate a straightforward embezzlement case. During the investigation, Daniela learns that Charles is involved in an unrelated fraud. Under the ACFE Code of Professional Ethics. Daniela should:

Tell the nonprofit’s board of trustees about Charles

Report Charles to law enforcement

Not disclose the information about Charles.

Resign from the engagement.

NO.46 Which of the following statements is TRUE according to rational choice theory?

Crime originates from a rational and conscious decision made by the perpetrator in order to receive an intended benefit.

Crime originates from the application of excessive pressure and influence on the perpetrator by external sources.

Crime can be deterred by increasing the potential for financial gain for the perpetrator.

Crime can be deterred by decreasing the personal risk to potential perpetrators.

NO.47 Article II of the ACFE Code of Professional Ethics prohibits illegal or unethical conduct, but It allows exceptions for unknowing violations of the law.

True

False

NO.48 During an external audit of an organization’s financial statements. Elena, the external auditor, uncovers significant internal control deficiencies at the audit client’s organization. She believes these deficiencies could result in a material misstatement of the financial statements. Which of the following should Elena do with regard to these findings?

Elena should suspend the audit and begin a new audit focused on the internal controls

Elena should report the findings in writing to the appropriate law enforcement agencies.

Elena should provide a written communication about the findings to senior management.

Elena should work independently to correct the underlying internal control deficiency.

NO.49 Which of the following is NOT an effective way to help prevent fraud through the organization’s performance measurement and management programs?

Including ethics-based metrics as a component of performance evaluations

Providing regular training to ensure that all employees are sufficiently prepared to perform their tasks

Establishing loosely defined job descriptions that allow employees flexibility in their roles

Tying employee compensation to reasonable organizational performance goals