CFS Fraud Risk Assessment Frameworks 2

Question 1

In the COSO ERM framework, which component specifically addresses the identification of potential events that could affect an organization's objectives?

Accepted Answer

Event Identification

Answer

Event Identification is the COSO ERM component where management identifies internal and external events that may affect the organization, distinguishing between risks and opportunities.

Question 2

A fraud risk assessment reveals a high-likelihood, low-impact scheme. According to risk management best practices, this risk should primarily be:

Accepted Answer

Mitigated with cost-effective preventive controls

Answer

High-likelihood risks warrant active mitigation even when impact is low, because frequent occurrences can accumulate into significant aggregate losses.

Question 3

Which fraud risk assessment technique involves comparing an organization's control environment against a defined set of criteria or standards?

Accepted Answer

Benchmarking against a control framework

Answer

Benchmarking against a control framework, such as COSO or ISO 31000, measures an organization's controls against established criteria to identify gaps.

Question 4

Under the ACFE's fraud risk management guide, which element is considered the foundation of an effective fraud risk management program?

Accepted Answer

Tone at the top and organizational culture

Answer

The ACFE emphasizes that tone at the top and an ethical organizational culture are the foundational elements upon which all other fraud risk management efforts depend.

Question 5

When performing a fraud risk assessment, 'fraud schemes' are mapped to 'business processes' in order to:

Accepted Answer

Identify which processes are most vulnerable to specific fraud types

Answer

Mapping fraud schemes to business processes allows assessors to pinpoint where specific fraud opportunities exist within the organization's operations.

(CFS) Certified Fraud Specialist Practice Test

(CFS) Certified Fraud Specialist Practice Test

CFS Fraud Risk Assessment Frameworks 2