ACFE CFE-Fraud-Prevention-and-Deterrence Exam With Confidence Using Practice Dumps

The Treadway Commission emphasizes improving internal controls, which include strengthening the internal audit function. Providing adequate resources and authority to the internal audit function ensures that it operates independently and effectively, which is critical for preventing and detecting fraud. The internal audit function can evaluate financial reporting systems, detect irregularities, and provide valuable recommendations for improvement. This recommendation aligns with the goal of reducing fraud and ensuring reliable financial reporting.

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Components of COSO’s Enterprise Risk Management Framework:

D. Review and revision:Ensures continuous improvement and adaptation of risk management practices to align with changing circumstances.

A. Event avoidance:Not explicitly listed as a component but is part of broader risk responses.

B. Risk tolerance:An element within risk management but not a separate component.

C. Compliance:A goal of ERM but not a framework component.

Conclusion:Review and revision is a core component of COSO's ERM framework.

Internal Audit Reporting Responsibilities:

Internal audit must maintain open communication with senior management and the board to ensure appropriate handling of fraud-related issues.

Establishing reporting protocols in advance ensures timely and consistent responses when fraud occurs.

Analysis of Other Options:

B. Periodic reporting is optional:Reporting fraud risks is a required responsibility.

C. Non-disclosure:Fails to fulfill the role of internal audit in governance and accountability.

D. No communication with the board:Misrepresents the internal audit's role in fraud oversight.

Conclusion:Discussing reporting protocols proactively with senior management and the board is the correct approach.