All CFE-Fraud-Prevention-and-Deterrence Test Inside ACFE Questions

 Principle Overview:

Responsibility pertains to the duty of an organization to act in the best interest of society, ensuring sustainable and ethical practices that benefit all stakeholders, including employees, customers, and the environment.

 Corporate Governance Definition:

Corporate governance frameworks emphasize corporate responsibility as a key pillar for maintaining societal trust and long-term value creation.

 Why Responsibility is Correct:

While transparency, fairness, and accountability are essential, responsibility uniquely emphasizes societal interests and ethical conduct​​.

Key Elements of an Ethics Program:

An effective ethics program involves assessing existing issues, such as ethical leadership gaps, and designing policies and practices to address them.

Analysis of Other Options:

A. Restricted access: Ethics policies should be accessible to external parties, including stakeholders, to enhance transparency.

C. Written policy alone: A written policy is insufficient without ongoing communication, training, and leadership support.

D. All of the above: Incorrect because options A and C are not true.

Conclusion:Considering existing ethical leadership issues is critical when designing an effective ethics program.

References:ACFE materials on ethics program design and implementation​​.

Five Components of COSO’s Internal Control Framework:

A. Control activities: Policies and procedures to ensure objectives are met.

C. Risk assessment: Identifying and analyzing risks.

D. Monitoring: Ongoing evaluation of control effectiveness.

Control environment: Includes the tone at the top and organizational ethics.

Information and communication: Facilitates the flow of relevant information.

Explanation of Ethical Culture:

While ethical culture is critical to the control environment, it is not one of the five standalone components of the framework.

Conclusion:Ethical culture is not a separate component but a part of the control environment.

References:COSO Internal Control—Integrated Framework documentation​​.

Behaviorist Theories on Reinforcement:

Positive reinforcement is the most effective way to encourage desired behavior by providing rewards for compliance.

Analysis of Options:

B. Public criticism: May create resentment and decrease morale.

C. Loss of paid time off: A punitive measure that may not motivate improvement.

D. Demotion: Effective for extreme cases but harsh and potentially counterproductive for minor errors.

Conclusion:Offering a bonus for perfect reconciliation aligns with behaviorist principles of positive reinforcement.

References:ACFE behavioral insights and fraud prevention strategies​​.