Certified Fraud Examiner CFE-Fraud-Prevention-and-Deterrence Syllabus Exam Questions Answers

Elements of Routine Activities Theory:

This theory posits that crime occurs when three elements converge:

Availability of suitable targets.

Absence of capable guardians.

Presence of motivated offenders.

Analysis of Other Options:

A. Conditioning theory: Focuses on learned behaviors through reinforcement.

C. Rational choice theory: Examines decision-making processes of offenders.

D. Social control theory: Relates to societal bonds preventing deviant behavior.

Conclusion:Routine activities theory best explains the convergence of these elements leading to crime.

References:Criminological theories referenced in ACFE study materials​​.

Hierarchy of Ethical Guidance Sources:

A. Contract law: Provides legal guidance on business agreements.

C. ACFE Code of Professional Ethics: Offers specific ethical standards for fraud examiners.

D. Philosophical principles: Offer foundational guidance on ethics.

B. Family and friends: While valuable for personal advice, they are the lowest reference point in determining professional ethics.

Conclusion:Guidance from family and friends is the lowest level of reference for determining ethical actions.

References:ACFE standards on ethical decision-making​​.

 Definition of Professional Skepticism:

Professional skepticism requires maintaining a questioning mindset and critically assessing evidence throughout the fraud examination process.

 Why D is Correct:

Professional skepticism ensures that fraud examiners remain vigilant and rely on evidence to conclude whether fraud has occurred or not. It is dispelled only when sufficient evidence supports a clear conclusion.

 Why Other Options are Incorrect:

A: While skepticism is critical, it does not mean refusing to acknowledge credible evidence.

B: Assuming no fraud occurred contradicts the principle of skepticism.

C: Hypotheses should consider the nature of the assignment and available information​​.

COSO Definition of Internal Control:

COSO defines internal control as a process executed by an entity’s board, management, and personnel to provide reasonable assurance about achieving objectives in operations, reporting, and compliance.

Analysis of Options:

A. Corporate compliance: Corporate compliance focuses on adhering to laws and regulations, not the broader operational objectives.

B. Fraud risk management: This is a component of internal control, not its definition.

C. Risk assessment: This is a step within the internal control process but not the overarching process.

D. Internal control: Matches the COSO definition accurately.

Conclusion:Internal control is the correct answer as defined by COSO.

References:COSO Internal Control Framework documentation​​.