New CFE-Fraud-Prevention Dumps For Preparing Certified Fraud Examiner Certified ACFE Exam Well

Updated CFE-Fraud-Prevention Dumps Questions Are Available [2026] For Passing ACFE Exam

NEW QUESTION # 28
Julia, an internal auditor, is formalizing a process to evaluate the effectiveness of the company's control system over time, including both ongoing evaluations and periodic separate evaluations.
Julia's initiative BEST pertains to which component of the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control--Integrated Framework?

• A. Risk assessment
• B. Monitoring
• C. Control environment
• D. Control activities

Answer: B

Explanation:
The COSO framework outlines monitoring as one of its five core components, which involves evaluating the effectiveness of internal controls over time. Monitoring includes both ongoing evaluations and separate evaluations, which is exactly what Julia is initiating. This distinguishes monitoring (correct) from control activities (which pertain to execution of policies), risk assessment (which identifies and analyzes risks), and control environment (which is the tone at the top).

NEW QUESTION # 29
According to the differential reinforcement theory, behavior is weakened when positive rewards are gained or punishment is avoided.

• A. False
• B. True

Answer: A

Explanation:
Differential Reinforcement Theory:
This theory suggests behavior is strengthened when positive rewards are gained or punishment is avoided, not weakened.
The premise is the opposite of what the statement claims.
Conclusion: The statement is incorrect because differential reinforcement strengthens, not weakens, behavior.

NEW QUESTION # 30
Rosie, a Certified Fraud Examiner (CFE), conducted a fraud examination for her company that led to a confession of guilt from Dean. Which of the following statements in Rosie's verbal report to management would violate the ACFE Code of Professional Ethics?

• A. "The evidence does not support Dean's confession."
• B. "Dean confessed to embezzlement."
• C. "Dean is guilty of embezzlement."
• D. "Dean's confession is supported by the evidence."

Answer: C

NEW QUESTION # 31
Julia, an internal auditor, is formalizing a process to evaluate the effectiveness of the company's control system over time, including both ongoing evaluations and periodic, separate evaluations.
Julia's initiative BEST pertains to the component of the Committee of Sponsoring Organizations of the Treadway Commission's COSO Internal Control--Integrated Framework the Framework:

• A. Risk assessment
• B. Monitoring
• C. Control environment
• D. Control activities

Answer: B

Explanation:
The Management's Fraud-Related Responsibilities chapter defines monitoring as the process that assesses the effectiveness of a control system over time. The manual states that this component should include both ongoing evaluations and periodic separate evaluations, and that the findings should be measured against predefined criteria. This wording matches the question almost exactly. Monitoring also includes timely evaluation and communication of internal control deficiencies to the appropriate parties for corrective action. Because Julia is establishing a process for continuous and separate reviews of control effectiveness over time, her initiative falls squarely within the monitoring component of COSO's Internal Control--Integrated Framework.
None of the other components focus on the continuing evaluation of whether controls remain present and functioning over time in this way.

NEW QUESTION # 32
A manager intentionally overrides purchasing controls to expedite a legitimate emergency purchase. Which statement is MOST accurate?

• A. Management override can create risk even when the underlying purpose is legitimate
• B. Emergency situations eliminate control concerns
• C. Management override always constitutes fraud
• D. Override automatically strengthens controls

Answer: A

Explanation:
Management override is not necessarily fraudulent, but bypassing controls increases risk. Even legitimate exceptions should be documented, monitored, and approved to prevent abuse and preserve control effectiveness.

NEW QUESTION # 33
For Its compliance program to be effective, an organization must perform procedures to ensure management hires only ethical Individuals who exercise a substantial measure of discretion In acting on the organization's behalf

• A. False
• B. True

Answer: B

Explanation:
Importance of Hiring Ethical Individuals:
Ethical hiring practices are foundational to an effective compliance program. Employees with a high measure of discretion can significantly impact organizational behavior and risk.
Pre-hiring background checks, ethical screening, and thorough interviews help mitigate the risk of unethical behavior.

NEW QUESTION # 34
Which of the following is one of the four recommendations made by the National Commission on Fraudulent Financial Reporting (the Treadway Commission) to reduce the probability of fraud in financial reports?

• A. Have a mandatory independent finance committee
• B. Provide adequate resources and authority to the internal audit function
• C. Develop a written charter for the audit committee
• D. Assign oversight of the hotline reporting program to company shareholders

Answer: B

Explanation:
The Treadway Commission emphasizes improving internal controls, which include strengthening the internal audit function. Providing adequate resources and authority to the internal audit function ensures that it operates independently and effectively, which is critical for preventing and detecting fraud. The internal audit function can evaluate financial reporting systems, detect irregularities, and provide valuable recommendations for improvement. This recommendation aligns with the goal of reducing fraud and ensuring reliable financial reporting.

NEW QUESTION # 35
In identifying the inherent fraud risks that could apply to the organization, the fraud risk assessment team should discuss:

• A. All of the above
• B. The possibility of management's override of controls
• C. The organization's incentive programs
• D. Risks to the organization's reputation

Answer: A

NEW QUESTION # 36
A fraud examiner discovers evidence suggesting possible misconduct by a senior executive. The examiner's supervisor instructs him to stop investigating and destroy his working papers. What should the examiner do?

• A. Follow instructions because management has authority over the investigation
• B. Ignore the evidence because it involves senior management
• C. Preserve the evidence and act in accordance with professional and legal obligations
• D. Destroy the working papers after documenting the request

Answer: C

Explanation:
Professional standards require fraud examiners to maintain integrity and exercise due professional care. Destroying evidence could compromise the investigation and potentially violate legal obligations. Evidence should be preserved and handled according to applicable policies and laws.

NEW QUESTION # 37
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:
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).

NEW QUESTION # 38
Andrew, an internal auditor, is formalizing a process to identify and evaluate threats to his company's ability to achieve its objectives. Andrew's initiative BEST pertains to whichcomponent of the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control-- Integrated Framework?

• A. Monitoring
• B. Control environment
• C. Control activities
• D. Risk assessment

Answer: D

Explanation:
Risk assessment is a core component of the COSO Framework and focuses on identifying, analyzing, and evaluating risks that could affect the organization's objectives. Andrew's initiative to evaluate threats aligns with this component, as it involves understanding the potential risks and their impact on achieving the organization's goals.

NEW QUESTION # 39
Which of the following Is FALSE regarding proactive fraud auditing procedures?

• A. Implementing proactive fraud audit procedures demonstrates management's intention to aggressively look for possible fraudulent conduct
• B. Fraud audit procedures should be designed to incorporate an element of surprise
• C. Analytical review of the financial statements is best used to uncover small frauds that might be missed by other detection methods
• D. Fraud assessment questioning techniques are most appropriately used as part of the normal audit process

Answer: C

Explanation:
Proactive Fraud Auditing Procedures:
Analytical reviews are effective for identifying large or unusual trends and anomalies, not necessarily small frauds.

NEW QUESTION # 40
Which of the following statements is MOST ACCURATE regarding an effective system of anti- fraud controls?

• A. It focuses more on preventive controls than detective controls.
• B. It fully eliminates the risk of fraud by removing opportunities for misbehavior.
• C. It prioritizes implementing detective controls over preventive controls.
• D. It deters fraudsters by increasing the perception that fraud will be detected.

Answer: D

NEW QUESTION # 41
Who is ultimately responsible lor ensuring the effectiveness of the organization's anti-fraud program?

• A. External auditors
• B. Management
• C. The compliance function
• D. Internal auditors

Answer: B

Explanation:
Responsibility for Anti-Fraud Program Effectiveness:
Management holds ultimate responsibility for designing, implementing, and maintaining an effective anti-fraud program.
Internal and external auditors, as well as compliance functions, provide oversight and recommendations but are not directly responsible for the program's effectiveness.
Conclusion: Management is ultimately accountable for ensuring the success of the anti-fraud program.

NEW QUESTION # 42
Jenny is a highly respected employee at XYZ Corp. Her husband's gambling addiction has caused them to have a significant amount of debt. Jenny begins stealing money from the company to cover her husband's gambling losses. This situation best illustrates which leg of the Fraud Triangle?

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

Answer: A

Explanation:
Fraud Triangle Components:
The fraud triangle consists of perceived opportunity, rationalization, and perceived financial need.
Perceived non-shareable financial need refers to personal pressures, such as debt or addiction, that motivate fraudulent behavior.
Why D is Correct:
Jenny's actions are driven by her inability to share her financial struggles (her husband's gambling debts) with others, aligning with the perceived financial need leg of the fraud triangle.

NEW QUESTION # 43
According to behaviorists such as B. F. Skinner, which of the following scenarios is MOST LIKELY to occur when an undesired behavior is punished?

• A. The behavior will occur more frequently.
• B. The behavior will return when punishment ceases
• C. The behavior will be permanently suppressed
• D. The behavior will not be affected by the punishment

Answer: B

NEW QUESTION # 44
Which of the following statements about the fraud risk assessment process Is MOST ACCURATE?

• A. The fraud risk assessment is most effective when management's influence on the process is limited
• B. If the individuals conducting the fraud risk assessment truly believe that fraud could not happen at the organization, then the assessment process should reflect that belief.
• C. To ensure the independence of the team members, a fraud risk assessment must be conducted by a consultant or other external party.
• D. The fraud risk assessment can be effectively conducted by people inside or outside of the organization.

Answer: D

Explanation:
Conducting a Fraud Risk Assessment:
Both internal and external parties can effectively conduct fraud risk assessments.
Internal teams provide organizational insight, while external parties bring objectivity and specialized expertise.

NEW QUESTION # 45
According to the results of behavioral studies, such as those conducted by B. F. Skinner, application of punishment to undesired behavior typically results in which of the following?

• A. increase in the occurrence of the undesired behavior
• B. No effect on the occurrence of the undesired behavior
• C. Permanent suppression of the undesired behavior
• D. Temporary suppression of the undesired behavior

Answer: D

Explanation:
Punishment may temporarily suppress undesired behavior but does not address the root cause or provide alternative positive behaviors.
Once punishment ceases, the behavior often resurfaces.

NEW QUESTION # 46
Which organizational factor is MOST likely to undermine an anti-fraud culture?

• A. Tolerance of policy violations by high-performing employees
• B. Anonymous reporting mechanisms
• C. Ethical leadership behavior
• D. Consistent enforcement of policies

Answer: A

Explanation:
Allowing top performers to violate policies sends the message that results matter more than ethics. Such inconsistency weakens accountability, damages trust, and increases the likelihood of future misconduct throughout the organization.

NEW QUESTION # 47
Which of the following is included in the G20/OECD Principles of Corporate Governance?

• A. Guidance regarding appropriate board structures, responsibilities, and procedures
• B. An examination of the importance of effectively designed and implemented internal control mechanisms within an organization
• C. A call to support the equal treatment of all members of an organization's governing body
• D. A requirement for corporations to establish a legal, regulatory, and institutional framework to support good governance practices

Answer: A

Explanation:
The G20/OECD Principles include:
"Guidance regarding board responsibilities, including establishing appropriate board structures, assigning clear responsibilities, and ensuring board accountability."

NEW QUESTION # 48
As part of its anti-fraud program, Elm Company is outlining the responsibilities of different stakeholders. Who is ultimately responsible for ensuring the effectiveness of the organization's anti- fraud program?

• A. Management
• B. The compliance function
• C. Internal auditors
• D. Forensic accountants

Answer: A

Explanation:
Management is ultimately responsible for ensuring the effectiveness of the organization's anti- fraudprogram. They set the tone at the top, establish internal controls, and ensure that the necessary resources and oversight mechanisms are in place to prevent and detect fraud. Other stakeholders, such as auditors and compliance officers, provide support but do not bear ultimate responsibility.

NEW QUESTION # 49
Which of the following would MOST LIKELY be a violation of the ACFE Code of Professional Ethics?

• A. Tom, a CFE, was hired by a client to conduct a fraud examination but found nothing amiss. A year later, he received a court order to provide the client's file to the ordering court. Tom complied with the court order, even though he did not have the client's authorization to do so.
• B. Vivian, a CFE, accepted an assignment to conduct a fraud examination within a manufacturing company. Because she was in a hurry to complete the investigation, she overlooked key items of evidence and ended up failing to uncover a major fraud scheme.
• C. All of the above are violations.
• D. Rodrigo. a CFE. uncovered several material Internal control deficiencies unrelated to the Kickback scheme he was Investigating. In his final report to management. Rodrigo included information about the deficiencies even though they were unrelated to the situation he was hired to investigate.

Answer: C

Explanation:
Ethical Standards:
Each scenario demonstrates a failure to meet the ethical and professional responsibilities outlined in the ACFE Code.
Conclusion: All scenarios represent violations of the ACFE Code of Professional Ethics.

NEW QUESTION # 50
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