Fraud Risk Assessment Frameworks Flashcards
7 cards from real CFS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Fraud Risk Assessment Frameworks flashcards as text
The 'fraud triangle' is most useful in a fraud risk assessment for:
Answer: Understanding motivating conditions that enable fraud to occur
The fraud triangle (pressure, opportunity, rationalization) helps assessors understand the conditions that make individuals susceptible to committing fraud.
In a fraud risk assessment, 'anti-fraud controls' are evaluated on which two dimensions?
Answer: Design effectiveness and operating effectiveness
Controls are evaluated on whether they are properly designed to address the risk (design effectiveness) and whether they are actually functioning as intended (operating effectiveness).
Which scenario represents an example of 'control override' that a fraud risk assessment should specifically address?
Answer: A manager approving transactions that bypass the normal authorization limits
Management override of controls is a specific fraud risk where individuals with authority circumvent established controls, and it must be explicitly assessed.
During a fraud risk assessment workshop, the facilitator asks participants to consider 'what if a trusted employee decided to steal?' This approach is known as:
Answer: Scenario analysis
Scenario analysis involves constructing hypothetical fraud situations to stress-test the organization's controls and identify vulnerabilities.
According to ISO 31000, the fraud risk assessment process should be:
Answer: An iterative process integrated into organizational management
ISO 31000 emphasizes that risk management, including fraud risk assessment, should be iterative, dynamic, and integrated into the organization's ongoing management activities.
Which factor would most INCREASE the assessed likelihood of a fraud scheme occurring?
Answer: Recent turnover in the internal audit function
Turnover in internal audit reduces the organization's monitoring capacity, which is a control weakness that increases the likelihood of undetected fraud.
A fraud risk heat map visually depicts risks based on which two factors?
Answer: Likelihood and impact
A heat map plots fraud risks on a matrix using likelihood (probability) on one axis and impact (consequence) on the other to prioritize risk responses.