CFE-Fraud-Prevention-and-Deterrence Certification Overview - [Dec 20, 2025] Latest CFE-Fraud-Prevention-and-Deterrence PDF Dumps
The Best ACFE CFE-Fraud-Prevention-and-Deterrence Study Guides and Dumps of 2025
NEW QUESTION # 90
Which of the following statements regarding recommended vendor due diligence procedures is MOST ACCURATE?
- A. An organization should avoid revealing that it is seeking information about potential vendors prior to starting a relationship with them.
- B. An organization should request that new vendors fill out a questionnaire about their background immediately after signing a contract with them.
- C. An organization should include a clause in the contract requiring the vendor to report any misconduct before entering into an agreement with them.
- D. An organization should subject vendors to an internal audit conducted by the organization's own auditors before agreeing to do business with them.
Answer: C
Explanation:
* Best Practices for Vendor Due Diligence:
* Including a clause requiring vendors to report misconduct demonstrates a commitment to transparency and ethical standards.
* This measure also ensures accountability and provides the organization with critical information about potential issues.
* Analysis of Other Options:
* A. Internal audits: While valuable, conducting internal audits of vendors before an agreement is impractical and costly.
* B. Concealing due diligence efforts: Transparency in due diligence helps build trust with vendors.
* C. Post-contract questionnaires: Due diligence must occur before contracts are signed.
* Conclusion:Including a contractual clause about misconduct reporting is the most accurate recommendation.
References:ACFE guidelines on vendor due diligence and fraud prevention.
NEW QUESTION # 91
Which of the following is TRUE regarding the G20/OECD Principles of Corporate Governance?
- A. They are intended to be applicable in emerging markets but not in developed economies.
- B. They are required to be implemented by all corporations in the jurisdictions that have officially adopted them.
- C. They assert that a corporate governance framework should ensure that the treatment of shareholders differs based on the class of stock they own.
- D. They state that a corporate governance framework should promote transparent and fair markets and the efficient allocation of resources.
Answer: D
Explanation:
Comprehensive and Detailed in Depth Explanation:
The G20/OECD Principles of Corporate Governance advocate for transparent and fair markets and the efficient allocation of resources, making Option A the correct statement. These principles are internationally recognized as a standard for policy makers, investors, corporations, and other stakeholders worldwide. The principles are intended to apply to both developed and emerging markets, not justemerging ones (rejecting Option C), and while influential, they are not legally binding mandates (rejecting Option D). They also support the equitable treatment of shareholders, regardless of share class (rejecting Option B).
Reference:Fraud Examiners Manual, 2022, Fraud Prevention and Deterrence, Corporate Governance - Section 4.308.
NEW QUESTION # 92
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) defines____________ as
"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. Internal control
- B. Corporate compliance
- C. Fraud risk management
- D. Risk assessment
Answer: A
Explanation:
* COSO Definition of Internal Control:
* COSO defines internal control as a process executed by an entity's board, management, and personnel to provide reasonable assurance about achieving objectives in operations, reporting, and compliance.
* Analysis of Options:
* A. Corporate compliance: Corporate compliance focuses on adhering to laws and regulations, not the broader operational objectives.
* B. Fraud risk management: This is a component of internal control, not its definition.
* C. Risk assessment: This is a step within the internal control process but not the overarching process.
* D. Internal control: Matches the COSO definition accurately.
* Conclusion:Internal control is the correct answer as defined by COSO.
References:COSO Internal Control Framework documentation.
NEW QUESTION # 93
Which of the following is FALSE regarding a background check policy for employees?
- A. 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.
- B. As part of the screening process, management should contact the references provided by the job candidate.
- C. When verifying past employment, management should only ask previous employers to verify the dates the candidate was employed.
- D. 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
Answer: C
NEW QUESTION # 94
XYZ. Inc. is a publicly traded, multi-national corporation. Which of the following statements is TRUE regarding the corporate governance requirements that XYZ is subject to?
- A. XYZ is subject to the Universal Corporate Governance Act because it is a publicly traded corporation.
- B. XYZ must comply with the various laws and regulations in the countries in which it operates
- C. XYZ is not required to comply with any corporate governance requirements because it operates in multiple jurisdictions
- D. XYZ is required to comply with G20'OECD Principles of Corporate Governance.
Answer: B
NEW QUESTION # 95
According to behaviorists such as B F Skinner, which of the following scenarios is mostly likely to occur when an undesired behavior is punished?
- A. The behavior will be permanently suppressed
- B. The behavior will occur more frequently.
- C. The behavior will not be affected by the punishment
- D. The behavior will return when punishment ceases
Answer: A
NEW QUESTION # 96
In Ihe context of fraud examination, integrity requires all of the following EXCEPT:
- A. Subordination of desires for personal gain to the interests of clients, employers, and the public
- B. Independence of mental attitude
- C. An ability to analyze situations where no professional rules are specifically applicable and determine right from wrong
- D. Avoidance of differences of opinion
Answer: D
Explanation:
* Integrity in Fraud Examination:
* Integrity involves critical thinking, independence, and prioritizing ethical principles over personal gain. Healthy debate and differences of opinion are integral to maintaining objectivity.
* Why Option D is Incorrect:
* Avoiding differences of opinion contradicts the need for professional skepticism and robust analysis in fraud examination.
* Conclusion:Integrity does not require the avoidance of differences of opinion, making D the correct answer.
References:ACFE Code of Professional Ethics and fraud examination standards.
NEW QUESTION # 97
International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the establishment of anti-fraud internal controls within an organization.
- A. True
- B. False
Answer: B
NEW QUESTION # 98
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) defines_____________as
"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. Internal control
- B. Corporate compliance
- C. Fraud risk management
- D. Risk assessment
Answer: A
NEW QUESTION # 99
Jane, a Certified Fraud Examiner (CFE). was hired to conduct a fraud examination at XYZ Company. Her examination did not reveal any conclusive evidence that fraud had occurred or was occurring. Consequently.
XYZ's management asked Jane to state in her 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. The ACFE Code of Professional Ethics prohibits Jane from complying with management's request
- A. True
- B. False
Answer: B
NEW QUESTION # 100
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?
- A. Governance and culture
- B. Operating environment
- C. Independent monitoring
- D. Risk tolerance
Answer: A
Explanation:
Components of COSO Enterprise Risk Management (ERM):
* The COSO ERM framework emphasizes the integration of risk management with strategy and performance, comprising the following components:
* Governance and culture.
* Strategy and objective-setting.
* Performance.
* Review and revision.
* Information, communication, and reporting.
Why D is Correct:
* Governance and culture set the foundation for an organization's risk management practices by establishing oversight, ethical values, and the operating structure.
Why Other Options are Incorrect:
* A (Independent monitoring): Monitoring is part of internal control, not specifically ERM.
* B (Operating environment): Not a COSO ERM component.
* C (Risk tolerance): A concept within ERM but not a standalone component.
NEW QUESTION # 101
Which of the following is TRUE regarding G20/OECD Principles of Corporate Governance (the Principles)?
- A. The Principles are intended to be applicable in developed economies but not in emerging markets.
- B. The Principles state that an entity's corporate governance framework should ensure the equitable treatment of all shareholders.
- C. The Principles are required to be implemented by all corporations in the jurisdictions that have officially adopted them
- D. The Principles state that an entity's corporate governance framework should discourage active cooperation between corporations and stakeholders in creating wealth.
Answer: B
NEW QUESTION # 102
XYZ, Inc. Is a specialty retailer of high-end ergonomic office furniture. The company receives a very large order from ABC Company, a new customer in a different country that wants to pay on credit. Which of the following is MOST ACCURATE regarding the due diligence procedures XYZ should perform on ABC before proceeding with this transaction?
- A. XYZ does not need to take any specific procedures to verify ABC's identity before accepting the transaction
- B. XYZ should examine ABC's net worth as part of deciding whether to allow the purchase on credit.
- C. XYZ only needs to undertake due diligence procedures if ABC conducts business in countries with known corruption risks.
- D. XYZ should perform the same level of due diligence as it would for any other customer to avoid claims of discrimination
Answer: B
Explanation:
* Due Diligence for Large Orders on Credit:
* Before extending credit, it is critical to assess the financial stability of the new customer to mitigate credit risk.
* Examining net worth provides a direct measure of ABC's ability to fulfill financial obligations.
* Analysis of Other Options:
* A. Corruption risk countries: Due diligence should be applied universally, not selectively.
* B. No verification needed: Verification is essential, especially for new customers.
* D. Same due diligence for all customers: While consistency is important, the level of due diligence may vary based on transaction specifics.
* Conclusion:Examining ABC's net worth is a necessary step in the due diligence process.
References:ACFE guidelines on credit risk assessment and due diligence.
NEW QUESTION # 103
Blue. Inc. is a specialty retailer of customized shipping containers. The company receives a very large order from Green Company, a new customer from a country that is known to have high corruption risks. Which of the following is MOST ACCURATE regarding the due diligence procedures Blue should perform on Green before proceeding with this transaction?
- A. Blue should perform the same level of due diligence as it would for any other customer to avoid claims of discrimination.
- B. Blue should consider Green's expected purchasing pattern and method of payment in determining whether to accept the transaction.
- C. Blue only needs to undertake due diligence procedures if Green is requesting to pay on credit.
- D. Blue does not need to undertake any specific due diligence procedures for this transaction.
Answer: B
Explanation:
Due Diligence in High-Corruption Risk Transactions:
* When operating in high-risk environments, enhanced due diligence is critical. This includes evaluating payment methods, transaction patterns, and the customer's reputation.
Why A is Correct:
* Analyzing purchasing patterns and payment methods helps identify red flags such as unusual payment terms or volumes inconsistent with Green's business profile.
Why Other Options are Incorrect:
* B: Due diligence is necessary regardless of payment terms.
* C: Enhanced due diligence for high-risk countries does not constitute discrimination.
* D: Ignoring due diligence poses significant compliance and reputational risks.
References:
* ACFE guidance on due diligence and anti-corruption practices in global commerce.
NEW QUESTION # 104
In a company with all of the following parties, who should have primary responsibility for the oversight of the organization s compliance program?
- A. The board of directors
- B. General counsel
- C. Internal audit
- D. The chief ethics officer
Answer: A
NEW QUESTION # 105
Which of the following is NOT included in G20/OECD Principles of Corporate Governance (the Principles)?
- A. Recognition of the importance of the role of stakeholders in corporate governance
- B. A request that governments have in place an appropriate framework to support good corporate governance practices
- C. Support for establishing stronger protection for foreign shareholders than for domestic shareholders
- D. Guidance regarding appropriate board structures, responsibilities, and procedures
Answer: B
NEW QUESTION # 106
The findings in the 2020 Report to the Nations include which of the following?
- A. The median losses caused by executives are lower than those caused by staff-level employees
- B. The majority of fraudsters have been previously punished by an employer for a fraud-related offense
- C. The most commonly reported red flag displayed by fraud perpetrators prior to the detection of their crime is complaints about management.
- D. Mote occupational frauds are committed by men than by women
Answer: D
Explanation:
* Findings from the 2020 Report to the Nations:
* A. Complaints about management: Not the most common red flag; lifestyle changes, such as living beyond means, are more common.
* B. Gender of fraudsters: The report consistently shows that men commit more occupational frauds than women.
* C. Median losses by executives vs. staff: Losses caused by executives are significantly higher.
* D. Past offenses: Most fraudsters do not have a prior fraud-related disciplinary history.
* Conclusion:Option B aligns with the findings of the 2020 Report to the Nations.
References:2020 ACFE Report to the Nations.
NEW QUESTION # 107
In response to an employee's failure to meet performance expectations, a manager demotes the employee to a junior-level position. This is an example of what type of behavioral response?
- A. Punishment
- B. Positive reinforcement
- C. Negative reinforcement
- D. None of the above
Answer: A
NEW QUESTION # 108
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