Ethical Obligations & Professional Conduct Flashcards
7 cards from real CFE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Ethical Obligations & Professional Conduct flashcards as text
A CFE learns during an engagement that the client is engaged in ongoing money laundering. The CFE should first:
Answer: Consult with legal counsel about reporting obligations and disengage if necessary
Upon discovering ongoing crimes, a CFE should consult legal counsel to understand reporting obligations and consider withdrawing from the engagement.
Which situation most clearly represents a violation of the CFE's duty of due diligence?
Answer: Failing to follow up on red flags identified during fieldwork
Ignoring identified red flags without follow-up is a failure of due diligence and violates the CFE's professional standards.
Under the ACFE's ethical framework, a CFE who is also an attorney must:
Answer: Comply with both sets of standards, with stricter rules governing
A CFE who is also an attorney must comply with both the ACFE Code and bar association rules, adhering to whichever imposes the stricter obligation.
A CFE is pressured by a client to exclude an unfavorable finding from a report. The ethical response is to:
Answer: Include the finding or withdraw from the engagement
A CFE must include all material findings or withdraw from the engagement; omitting them at a client's request compromises professional integrity.
The concept of 'independence in appearance' for a CFE means:
Answer: Avoiding situations that would cause a reasonable person to question objectivity
Independence in appearance means avoiding relationships or circumstances that could lead a reasonable observer to doubt the CFE's objectivity.
A CFE discovers evidence of fraud by a client's senior executive while performing unrelated consulting work. The CFE's obligation is to:
Answer: Inform appropriate parties within the organization or withdraw
Even when fraud is discovered incidentally, a CFE must inform appropriate parties within the organization or withdraw from the engagement.
Which of the following is NOT a required element of competent professional conduct for a CFE?
Answer: Holding a law degree in addition to CFE credentials
A law degree is not required for CFE competence; competence is defined by knowledge, skills, and diligence, not specific academic credentials beyond CFE requirements.