ACFE Fraud Prevention & Deterrence 2 — Questions and Answers
Question 1: According to ACFE research, what percentage of occupational fraud cases are detected through tips?
- About 10%
- About 20%
- About 43% (Correct answer)
- About 65%
Correct answer: About 43%
ACFE's Report to the Nations consistently shows that tips are the most common detection method, accounting for roughly 43% of cases.
Question 2: Which element is considered the most cost-effective fraud deterrent in an organization?
- Forensic accounting reviews
- Strong internal controls (Correct answer)
- Frequent external audits
- Insurance coverage
Correct answer: Strong internal controls
Strong internal controls are considered the most cost-effective deterrent because they proactively prevent fraud rather than detect it after the fact.
Question 3: What is the primary purpose of a fraud risk assessment?
- To prosecute fraudsters
- To identify and prioritize fraud vulnerabilities (Correct answer)
- To replace the internal audit function
- To satisfy regulatory requirements only
Correct answer: To identify and prioritize fraud vulnerabilities
A fraud risk assessment identifies where an organization is vulnerable to fraud so resources can be prioritized to address the highest-risk areas.
Question 4: The 'fraud triangle' concept was developed primarily by which researcher?
- Edwin Sutherland
- Donald Cressey (Correct answer)
- Joseph Wells
- W. Steve Albrecht
Correct answer: Donald Cressey
Donald Cressey developed the fraud triangle model based on his research into embezzlers, identifying pressure, opportunity, and rationalization as the three elements.
Question 5: Which component of an ethics program is MOST critical for setting the right organizational culture?
- Written code of conduct
- Annual compliance training
- Tone at the top from leadership (Correct answer)
- Whistleblower hotline
Correct answer: Tone at the top from leadership
Tone at the top—the ethical example set by senior management—is widely considered the most critical factor in establishing an anti-fraud culture.
Question 6: A company implements mandatory job rotation for employees handling cash. This control primarily addresses which fraud triangle element?
- Pressure
- Rationalization
- Opportunity (Correct answer)
- Motivation
Correct answer: Opportunity
Job rotation reduces the opportunity for fraud by preventing any single employee from maintaining exclusive, continuous control over assets or processes.
Question 7: Which type of background check is MOST relevant when hiring for a position with access to financial assets?
- Social media screening
- Credit history check (Correct answer)
- Physical fitness evaluation
- Personality assessment
Correct answer: Credit history check
A credit history check is especially relevant for financial positions because financial stress is a key fraud pressure, and past financial irresponsibility may signal risk.
ACFE Fraud Prevention & Deterrence 2
According to ACFE research, what percentage of occupational fraud cases are detected through tips?