CFE-Fraud-Prevention-and-Deterrence Questions and Answers

True

False

Overseeing the organization's fraud risk management activities

Designing the fraud risk management program

Punishing fraud perpetrators discovered through fraud risk management activities

Implementing the fraud risk management program

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

Conditioning theory

Routine activities theory

Rational choice theory

Social control theory

True

False

Event avoidance

Risk tolerance

Compliance

Review and revision

increase in the occurrence of the undesired behavior

No effect on the occurrence of the undesired behavior

Temporary suppression of the undesired behavior

Permanent suppression of the undesired behavior

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.

The team members should have experience in gathering and eliciting information

The team members might include both internal and external sources.

The team size should be limited to a maximum of three individuals

The team should consist of individuals with diverse knowledge, skills, and perspectives

Only a small percentage of perpetrators are punished when an organization deals with a fraud case internally.

Most fraud cases are only handled internally and are not referred to law enforcement for prosecution

The primary reason organizations decline to prosecute fraud cases is a belief that their internal discipline methods are sufficient

When fraud cases are handled internally, an employee is more likely to be suspended or put on probation than to be terminated for their crime.

An organization should subject vendors to an internal audit conducted by the organization's own auditors before agreeing to do business with them.

An organization should avoid revealing that it is seeking information about potential vendors prior to starting a relationship with them.

An organization should request that new vendors fill out a questionnaire about their background immediately after signing a contract with them.

An organization should include a clause in the contract requiring the vendor to report any misconduct before entering into an agreement with them.

Confront Bridgette about the disagreements and discuss how they increase the department's risk of fraud.

Include her disagreements with Bridgette as a factor when assessing the risk of fraud in the accounts receivable department.

Automatically designate the accounts receivable department as a high-risk area.

Have someone else perform the fraud risk assessment work related to the accounts receivable department's activities.

ABC must comply with specific listing standards for the stock exchange(s) on which it is listed

ABC is required to comply with G20/OECD Principles of Corporate Governance

ABC is not required to comply with any corporate governance requirements because it operates in multiple jurisdictions

ABC is subject to the Universal Corporate Governance Act because it is a publicly traded corporation.

Social control theory

Operant theory

Cognitive theory

Behavioral theory

Perceived non-shareable financial need

Rationalization

Perceived opportunity

Lack of personal Integrity

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