ACFE - Association of Certified Fraud Examiners Fraud Risk Assessment Questions and Answers

Question 1

A Certified Fraud Examiner is leading a new fraud risk assessment for a retail company that has never performed one before.
According to the ACFE's guidance, which of the following is the most appropriate first step in this process?

Accepted Answer

Identifying the potential inherent fraud risks relevant to the company's operations, industry, and locations.

Answer

Testing the operating effectiveness of the company's existing anti-fraud controls.

Answer

Designing and implementing a new set of preventive and detective controls.

Answer

Reporting the initial assessment findings and recommendations to the audit committee.

Question 2

After a fraud risk assessment identifies a significant risk of check tampering in the accounts payable department, management decides to eliminate paper checks and move all vendor payments to a third-party electronic payment platform that requires dual authentication. This action is an example of which type of risk response?

Accepted Answer

Transferring the risk

Answer

Mitigating the risk

Answer

Avoiding the risk

Answer

Accepting the risk

Question 3

What is the primary objective of conducting a fraud risk assessment within an organization?

Accepted Answer

To proactively identify specific fraud schemes the organization is susceptible to and evaluate the controls mitigating those risks. [1]

Answer

To assign accountability for past fraudulent incidents.

Answer

To guarantee the complete prevention of all fraudulent activities.

Answer

To fulfill the minimum requirements of regulatory compliance without further strategic action.

Question 4

During a fraud risk assessment, the team has identified over fifty potential fraud schemes. Which of the following factors are MOST crucial for prioritizing these identified risks for further action and resource allocation?

Accepted Answer

The likelihood of the scheme occurring and its potential significance or impact. [3, 4, 6]

Answer

The complexity of the scheme and the cost of a potential investigation.

Answer

The number of employees involved in the process and their tenure.

Answer

The ease of detection and the availability of external auditors.

Question 5

A fraud examiner facilitates a brainstorming session with the sales department to identify potential fraud risks. The examiner asks the team, "If you wanted to inflate your sales numbers to get a bigger bonus, and you couldn't get caught, how would you do it?" This risk identification technique is best described as:

Accepted Answer

Thinking like a fraudster.

Answer

Control environment assessment.

Answer

Residual risk calculation.

Answer

Root cause analysis.

Question 6

Which of the following is a primary benefit of formally documenting the organization's fraud risk assessment process and its results?

Accepted Answer

It provides a rational basis for management to design, implement, and evaluate its anti-fraud controls. [1, 2]

Answer

It satisfies all requirements for obtaining a business crime insurance policy.

Answer

It eliminates the possibility of residual fraud risk in the organization.

Answer

It serves as conclusive evidence in legal proceedings against any future fraudsters.