CFE Fraud Risk Assessment 2

Question 1

Which element of the Fraud Triangle refers to a perpetrator's ability to rationalize fraudulent behavior as acceptable?

Accepted Answer

Rationalization

Answer

Rationalization is the cognitive process by which a fraudster justifies dishonest acts to themselves, completing the Fraud Triangle.

Question 2

During a fraud risk assessment, which approach involves analyzing data to identify anomalies that may indicate fraud?

Accepted Answer

Data analytics

Answer

Data analytics involves examining large volumes of transactional data to detect patterns, outliers, or anomalies that could signal fraudulent activity.

Question 3

A fraud risk assessment should be updated most frequently when which of the following occurs?

Accepted Answer

A significant organizational change such as a merger occurs

Answer

Material organizational changes such as mergers, acquisitions, or restructurings introduce new fraud risks that require the assessment to be revised promptly.

Question 4

Which fraud scheme would most likely be identified by reviewing split purchase orders?

Accepted Answer

Bid rigging

Answer

Split purchase orders are a red flag for bid rigging or circumventing competitive bidding thresholds, allowing purchases to be made without proper approval.

Question 5

Which of the following best describes 'inherent risk' in the context of fraud risk assessment?

Accepted Answer

The raw risk of fraud existing before any controls are considered

Answer

Inherent risk is the level of fraud risk present in a process or account before considering the effect of any internal controls.

Certified Fraud Examiner Exam Practice Test

Certified Fraud Examiner Exam Practice Test

CFE Fraud Risk Assessment 2