ACFE CFE-FRAUD-PREVENTION-AND-DETERRENCE Exam Dumps

Certified Fraud Examiner - Fraud Prevention and Deterrence Exam

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Exam Code	CFE-FRAUD-PREVENTION-AND-DETERRENCE
Exam Name	Certified Fraud Examiner - Fraud Prevention and Deterrence Exam
Questions	255 Questions Answers With Explanation
Update Date	04, 14, 2026
Price	Was : $81 Today : $45 Was : $99 Today : $55 Was : $117 Today : $65

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Demo Questions

Question # 1

Employees should be kepi unaware that management is watching for lifestyle and behavior changes in staff members that might indicate fraud

A. True
B. False 

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Question # 2

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

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Question # 3

Gray, an independent Certified Fraud Examiner (CFE). was hired by Green president of the ABC Corporation, to investigate allegations that one oi ABC s employees is taking kickbacks. During the investigation. Gray learns that Green is involved in an unrelated fraud. Under the ACFE Code of Professional Ethics. Gray should: 

A. Tell the company's board of directors about Green
B. Report Green to law enforcement.
C. Resign from the engagement
D. Not disclose the information about Green. 

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Question # 4

Smith, a retail sales manager, wants to decrease the level of cash register over-and-short discrepancies among his sales team. According to behaviorist theories, which of the following options would be the most effective way for Smith to encourage his team members to keep their cash drawers in balance?

A Offer a bonus to anyone whose drawer reconciles perfectly for sixty days.
B. Take away an hour of paid time off for each time the drawer is over or short.
C. Publicly call out and criticize employees whose cash drawers are over or short
D. Demote employees who continue to have reconciliation discrepancies

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Question # 5

In the 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. Avoidance of differences of opinion
C. Independence of mental attitude
D. An ability to analyze situations where no professional rules are specifically applicable and determine right from wrong 

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Question # 6

Fraud risks related lo corruption include all of the following EXCEPT 

A. Espionage by competitor
B. Aiding and abetting vendor fraud
C. Payment of bribes
D. Receipt of kickbacks

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Question # 7

Which of the following would most likely be a violation of the ACFE Code of Professional Ethics?

A. Susan, a CFE was hired by a client to conduct a fraud examination but found nothing amiss A year later, she received a legal order from the local prosecutor's office to provide the client's file Susan complied with the court order, even though she did not have the client's authorization to do so
B. Green, a CFE. uncovered several material internal control deficiencies unrelated to the financial statement fraud he was investigating. In his final report to management. Green included information about the deficiencies even though they were unrelated to the situation he was hired to investigate.
C. Stephanie, a CFE. accepted a fraud examination assignment and then instructed a lower-level employee to assess the company's cash records for signs of fraud She took his word when he said there was no evidence of wrongdoing and ended up failing to uncover a very costly fraud scheme.
D. All of the above are violations

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Question # 8

Which of the following is NOT a responsibility of the organization s board of directors?

A. Acting as guardians of the organization s resources and assets
B. Managing the performance of employees charged with carrying out business activities
C. Assessing the strategy and underlying purpose of management's decisions and actions
D. Serving as the middlemen between shareholders and management 

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Question # 9

Which of the following is FALSE regarding a background check policy for employees'7

A. 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
B. When verifying past employment, management should only ask previous employers to verify the dates the candidate was employed.
C. As part of the screening process, management should contact the references provided by the job candidate
D. 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. 

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Question # 10

According to modern criminological studies, which of the following is the determinant aspect of white-collar crime'?

A. Organizational opportunity
B. Absence of risk factors
C. Potential legal punishment
D. Social status

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Question # 11

The generation and use of relevant, quality information to support the functioning of internal control is a principle related to which component of the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) Internal Control—Integrated Framework (the Framework)? 

A. Risk assessment
B. Control environment
C. Monitoring
D. Information and communication

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Question # 12

Which of the following is TRUE regarding the communication of the fraud risk assessment process?

A. The communication should be in the form of a personalized message from the assessment sponsor
B. The communication should actively encourage employees to participate in the assessment process
C. The communication should be visibly disseminated throughout the business
D. All of the above

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Question # 13

According to the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control—Integrated Framework (the Framework), there are five interrelated components of a company's internal control. Which of the following is NOT among these five components?

A. Ethical culture
B. Risk assessment
C. Control activities
D. Monitoring

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Question # 14

Jenny is a highly respected employee at XYZ Corp Her husbands gambling addiction has caused them to have a significant amount of debt Jenny begins stealing money from the company to cover her husbands gambling losses. This situation best illustrates which leg of the Fraud Triangle?

A. Perceived opportunity
B. Rationalization
C. Perceived non-shareable financial need
D. Perceived acquiescence 

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Question # 15

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:

A. The continued pressures of a culture that rewards affluence and success
B. The economy's increased reliance on credit
C. The decrease in funds available from government assistance programs
D. The increased opportunity for wrongdoing as a result of advancing information technologies

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Question # 16

Which of the following is FALSE regarding the discussion about the financial statements susceptibility to fraud that auditors are required to have under International Standard on Auditing (ISA) 240?

A. A The audit team should discuss how management could conceal fraud
B.  The audit team should consider factors that provide the opportunity for fraud.
C. The audit team should focus solely on how the company's assets could be misappropriated
D. The audit team should consider whether the organizational culture might enable the rationalization of fraud 

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Question # 17

According to the 2018 Report to the Nations, which of the following is the most common method by which frauds are detected? 

A. Confession
B. External audit
C. Tips
D. Internal audit 

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Question # 18

The theory of differential association is used frequently to explain white-collar criminality Which of the following is NOT one of the assertions or principles of differential association?

A. Criminal behavior is learned from other people in a process of communication
B. Criminal behavior is learned using the same mechanisms as other learning
C. Criminal behavior is acquired through participation with intimate personal groups
D. The process of learning criminal behavior Is the same as pure imitation

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Question # 19

According to the 2018 Report to the Nations.___________schemes are the most common form of occupational fraud, while_________schemes are the costliest form of occupational fraud

A. Financial statement fraud, corruption
B. Asset misappropriation; financial statement fraud
C. Asset misappropriation; corruption
D. Corruption; asset misappropriation

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Question # 20

Sofia, a Certified Fraud Examiner (CFE). look an introductory class in computer forensics When a client thought there might be evidence of a crime on his hard drive. Sofia decided to conduct a forensic examination of the hard drive even though she had no experience or advanced training in this area Sofia's conduct would likely be a violation of the ACFE Code of Professional Ethics

A. True 
B. False 

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Question # 21

In developing a corporate governance framework for an organization, directors and management must consider which of the following? 

A. The organization s cultural environment
B. The organization s legal and regulatory environment
C. The organization s ethical environment
D. All of the above

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Question # 22

Which of the following is FALSE regarding an organization's anti-fraud policy?

A. A detailed anti-fraud policy can make it easier to investigate and punish employees who commit fraud and other dishonest acts.
B. One of the most important considerations in developing the anti-fraud policy is to ensure every allegation is handled in a uniform-manner
C. To avoid legal problems in discharging employees, the anti-fraud policy should not include any specific examples of fraud and misconduct
D. In developing the anti-fraud policy, management should check with legal counsel regarding any legal considerations with respect to the policy 

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Question # 23

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

A. Evaluating whether management is actively retaining responsibility for oversight of the fraud risk management program
B. Attesting that the organization s financial statements are free of material misstatements caused by fraud
C. Reporting to regulators regarding the entity's vulnerability to fraud
D. Overseeing managements actions to manage fraud risks

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Question # 24

Which of the following is NOT included in the five fraud risk management principles described

A. Communicating the expectations of those governing the fraud risk management program
B. Deploying preventive and detective fraud control activities to mitigate fraud risk
C. Performing comprehensive fraud risk assessments to identify specific fraud schemes
D. Developing one-time evaluations for each fraud risk management principle 

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Question # 25

During the course of a fraud examination. Stefan, an employee of Acme Inc., approaches Marten, a Certified Fraud Examiner (CFE) and fellow employee of Acme, and tells him that he knows of a major fraud being committed by the chief financial officer (CFO). However. Stefan says he can only provide details if Marten promises him absolute confidentiality. How should Marten respond?

A. Agree that the information will be held in confidence, even though Marten knows it will not be
B. Take Stefan's request straight to Acme Inc.'s management
C. Tell Stefan that he will try to keep the information as confidential as possible
D. Not agree to the request for confidentiality 

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