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ACFE Certified Fraud Examiner - Fraud Prevention and Deterrence Sample Questions:

1. According to social control theory, which of the following questions are people MOST LIKELY to ask themselves when considering the possibility of violating the law?

A) "How can I prevent someone from learning what I did?"
B) "How likely am I to be punished for this crime?"
C) "What will my parents think if they find out?"
D) "Will I lose my job if my actions are discovered?"

2. During an external audit of an organization's financial statements. Peter, the external auditor, uncovers significant internal control deficiencies at the audit client's organization. He believes these deficiencies could result in a material misstatement of the financial statements. Which of the following should Peter do with regard to these findings?

A) Peter should provide a written communication about the findings to those charged with governance.
B) Peter should discreetly work with senior management to correct the underlying internal control deficiencies.
C) Peter should report the findings in writing directly to the appropriate regulatory agencies
D) Peter should make a public announcement that he is withdrawing from the audit engagement.

3. A fraud risk assessment identifies a scheme that has a low likelihood of occurrence but would cause catastrophic financial and reputational damage. How should the organization treat this risk?

A) Ignore it because likelihood is low
B) Evaluate both likelihood and impact when determining mitigation priorities
C) Remove it from the assessment
D) Focus only on frequent fraud risks

4. According to ACFE research, which of the following is the MOST COMMON method for detecting occupational fraud?

A) Management review
B) Tips
C) Internal audit
D) Document examination

5. 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?

A) Elena should report the findings in writing to the appropriate law enforcement agencies.
B) Elena should work independently to correct the underlying internal control deficiency.
C) Elena should suspend the audit and begin a new audit focused on the internal controls
D) Elena should provide a written communication about the findings to senior management.

Solutions: