CERTIFIED FORENSIC FRAUD EXAMINER (CFFE) MODULE THREE
FRAUD PREVENTION AND DETECTION
MONDAY: 22 April 2024. Morning Paper. Time Allowed: 3 hours.
Answer ALL questions indicating the letter (A, B, C or D) that represents the correct answer. This paper is made up of one hundred (100) Multiple Choice Questions. Each question is allocated one (1) mark.
1. Which one of the following factors does NOT affect employees’ ethical decisions?
A. Tension between personal standards and organisational ethical culture
B. Industry and organisational ethical codes
C. The law and other government regulations
D. Tension between personal standards and organisational need (1 mark)
2. Which one of the following fraud risks is associated with inadequate oversight over management, in financial reporting?
A. Lack of financial reporting internal controls
B. Perceived situational pressure
C. Pressures/incentives
D. Opportunity (1 mark)
3. Which one of the following parties is responsible for assisting management in evaluating the effectiveness of the fraud risk management program?
A. Risk management officer
B. Management
C. Board of directors
D. Internal auditor (1 mark)
4. According to COSO, the effectiveness of the internal control system can be evaluated assessing whether the five components of the COSO internal control integrated framework are in place and functioning effectively, and operating together in an integrated manner. Which of the following is NOT one of the components?
A. Control environment
B. Fraud risk oversight
C. Information and communication
D. Control activities (1 mark)
5. Which one of the following statements is NOT important for a company, to consider in regard to establishment of a document retention policy?
A. Specific rules for documenting and retaining records
B. General requirements related to electronic documents
C. Laws and regulations regarding recordkeeping requirements
D. None of the above (1 mark)
6. Which one of the following statements is NOT accurate in regard to fraud examination and integrity?
A. Fraud examination require independence of mind and avoidance of conflict of interest
B. Fraud examination require self-control of overwhelming desire for personal gain, over the interests of clients, employers and the public
C. Fraud examination only require ability to apply the set professional ethical standards in every situation
D. None of the above (1 mark)
7. Which one of the following is NOT one of the IOSCO principles for auditor oversight in regard to audit?
A. The oversight should be performed a body that acts and is seen to act in the interest of the oversight body
B. The oversight involves a regular review process designed to ascertain whether audit firms adhere to quality control policies and procedures
C. The oversight should take place within the audit firm, professional associates, and through government regulation
D. All of the above (1 mark)
8. According to The Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing, the internal audit team must NOT do which of the following?
A. Assess the risks of fraud
B. Conduct fraud audit
C. Evaluate the fraud risk management initiatives
D. Collect evidence of fraud detected during the audit engagement (1 mark)
9. The IOSCO principles for auditor oversight, effective oversight of the auditing profession does NOT include which of the following principles?
A. The mechanism does not require auditors to be subject to the discipline of an auditor oversight body that is independent of the audit profession
B. A mechanism to require that auditors have proper qualifications and competency
C. A mechanism to require that auditors are independent of the enterprises that they audit
D. The mechanism requires auditors to be subject to the discipline of an auditor oversight body that is independent of the audit profession (1 mark)
10. Which one of the following BEST describes the rationalisation leg of the fraud triangle?
A. “Management is not taking action on reported cases, I guess it is not that bad. I can also do the same”
B. “I need money to pay bills”
C. “Possibility of detection is very low”
D. “I have an emergency I have no other way to solve the problem” (1 mark)
11. Which one of the following BEST describes the opportunity leg of the fraud triangle?
A. “Management and the board are engaging in conflict of interest, so it is okay”
B. “I need money for an emergency need”
C. “The board does not have the capacity to provide oversight”
D. “I am entitled to more compensation” (1 mark)
12. Which one of the following BEST describes situational pressure?
A. “Management and the board are taking kickbacks, so it cannot be that bad?”
B. “I need money to pay my debts”
C. “We have spent more than the budget; we have to omit some expenses in this financial year’s financial statements”
D. “I have an emergency and I have no other way of solving the problem” (1 mark)
13. Which one of the following factors should an organisation NOT consider when designing the components of its compliance and ethics program?
A. Law and regulatory environment
B. Past incidences of fraudulent and corrupt activities
C. Industry size and standards
D. The effectiveness of the internal controls (1 mark)
14. Which one of the following is NOT one of the fraud risk assessment principles?
A. Conducting ongoing detection of emerging fraud risks
B. Assessing situations or circumstances that could significantly impact the internal control system
C. Setting clear organisational objectives
D. Identification of fraud risks (1 mark)
15. COSO identified five components that MUST be integrated into which one of the following?
A. Compliance program
B. Ethics program
C. Prevention program
D. Internal control system (1 mark)
16. Which one of the following parties has responsibility for the design and implementation of COSO interrelated component?
A. Board
B. Management
C. Audit committee
D. Internal auditor (1 mark)
17. Which one of the following elements is NOT a desirable component of the compliance program?
A. Designated compliance officer
B. Appropriate incentives for compliance with the program
C. Effective internal controls
D. Continuous evaluation of the compliance program (1 mark)
18. Which one of the following controls CANNOT help to mitigate the risk of rationalisation?
A. Fraud awareness training
B. Employees support program
C. Proactive forensic audits
D. Comprehensive code of ethics (1 mark)
19. Which one of the following is NOT a proactive fraud detection control?
A. Special audits
B. Fraud assessment questioning
C. Independent reconciliations
D. Fraud detection (1 mark)
20. Which one of the following is a component of fraud prevention health check-up, that is related to the extent to which the board of directors are providing oversight over fraud risk management?
A. Fraud risk governance
B. Fraud risk tolerance
C. Fraud risk assessment
D. None of the above (1 mark)
21. Which one of the following is NOT a component of a comprehensive ethics program?
A. Focus on successful leadership
B. Ethic compliance officer
C. Values statement
D. Ethics reporting and ethics data (1 mark)
22. Which one of the following is a desirable component of a comprehensive ethics program?
A. A designated ethics official
B. An effective internal control system
C. An effective fraud risk management program
D. All the above (1 mark)
23. Which one of the following is NOT a responsibility for the internal auditor while conducting an audit engagement?
A. Continuous monitoring of the effectiveness of the fraud risk management program
B. Evaluate whether management is actively evaluating the effectiveness of the fraud risk management program
C. Consider fraud risks in the assessment of internal control design and implementation
D. None of the above (1 mark)
24. The commission formed in 1985 with the purpose of defining the auditor’s responsibility for preventing and detecting fraud in financial reporting is known as:
A. COSO Commission
B. Sarbanes Oxley
C. International Accounting Standards Board
D. The treadway commission (1 mark)
25. Which one of the following is NOT accurate in regard to good corporate governance framework?
A. It is not adaptable to change
B. Is appropriate for the organisation’s legal and regulatory environment
C. Takes into account the organisation’s cultural and ethical environment
D. It is dynamic (1 mark)
26. Which one of the following statements is NOT accurate in regard to OECD principles of Corporate Governance?
A. The OECD Principles of Corporate Governance support establishing equal protection for foreign shareholders than domestic shareholders
B. The OECD Principles of Corporate Governance support establishing equal protection for domestic shareholders than foreign shareholders
C. The OECD Principles of Corporate Governance support equitable treatment for all shareholders
D. The OECD Principles of Corporate Governance support establishing stronger protection for minority shareholders, because they are more vulnerable (1 mark)
27. According to the OECD Principles of corporate governance, which of the following is NOT accurate in regard to an entity’s corporate governance framework?
A. Ensure proportionate treatment according to shareholding
B. Encourage active cooperation between corporations and stakeholders in creating wealth and jobs
C. Ensure the timely and accurate disclosure of all material matters regarding the corporation
D. None of the above (1 mark)
28. Which one of the following parties is responsible for holding the board of directors accountable for the company’s resources?
A. The stakeholders
B. The regulatory authority
C. Executive board
D. Shareholders (1 mark)
29. Which one of the following is NOT a recommendation of the Treadway Commission to the audit committee to prevent financial statement fraud?
A. To be informed and vigilant
B. To have adequate resources and authority
C. To provide oversight over management
D. None of the above (1 mark)
30. Which one of the following parties is responsible for providing oversight over employees?
A. Managers and supervisors
B. External auditors
C. The board of directors
D. Management (1 mark)
31. Effective corporate governance practices make business sense for any serious organisation. However, it is a must for some organisations to have effective corporate governance practices. Which one of the following is an example of such kind of organisation?
A. A limited company
B. A sole proprietor enterprise
C. A public limited company
D. A limited partnership enterprise (1 mark)
32. Which one of the following BEST describes oversight responsibilities of different parties for an organisation’s direction, operations and performance?
A. Management
B. Audit committee
C. Corporate compliance
D. None of the above (1 mark)
33. Which one of the following BEST describes the principle related to clarity, accuracy, completeness and timeliness of the financial statements and other information provided management to shareholders?
A. Fairness
B. Accountability
C. Responsibility
D. None of the above (1 mark)
34. Which one of the following is the MOST effective method of fraud prevention?
A. Designing and implementing detective controls
B. Designing and implementing preventive controls
C. Designing and implementing strong controls
D. All the above (1 mark)
35. Which one of the following statements BEST describes reengineering of controls?
A. Reengineering of controls involves enhancing the controls
B. Reengineering of controls involves enforcing the controls
C. Reengineering of controls is a science of reorganising the existing controls
D. Reengineering of controls is an art of reorganising the existing controls (1 mark)
36. Which one of the following is NOT a control environment principle of the COSO, that supports the design and implementation of an effective control environment?
A. Personnel at all levels demonstrate commitment to integrity and ethical values
B. Board should be independent of management and oversee the design and implementation of the internal control
C. Organisation holds internal auditors accountable for the effectiveness of the internal controls
D. None of the above (1 mark)
37. Which one of the following is NOT a fraud risk assessment principle of the COSO?
A. The organisation sets clear objectives to enable the identification and assessment of risks relating to the objectives
B. The organisation identifies and detects the risks associated with the achievement of the objectives
C. The organisation identifies changes that would significantly impact the system of internal controls
D. None of the above (1 mark)
38. Which one of the following is among the board’s responsibilities for fraud risk management?
A. Design and implementation of controls to mitigate the risks
B. Monitoring and proactively improving the fraud risk management programme
C. Performing and regularly updating the fraud risk assessment
D. None of the above (1 mark)
39. Which one of the following topics should NOT be covered in employee anti-fraud training?
A. A statement that management is going to respond to fraud allegation in a certain and swift manner
B. A statement that management has no appetite for fraudulent activities
C. An explanation of the exact methods that management is going to use in conducting fraud detection activities
D. All the above (1 mark)
40. Lack of effective oversight over management and an ineffective internal control system are examples of which type of fraud risk associated with financial statement fraud?
A. Rationalisation
B. Pressure
C. Opportunity
D. Collusion (1 mark)
41. Which one of the following parties is responsible for fraud prevention in an organisation?
A. Internal auditors
B. External auditors
C. All employees
D. Board of Directors (1 mark)
42. Which one of the following statements is NOT accurate according to the differential reinforcement theory?
A. Behaviour is weakened positive stimuli
B. Behaviour is weakened when punishment is avoided
C. Behaviour is reinforced when punishment is applied
D. None of the above (1 mark)
43. Which one of the following is NOT an effective method of increasing the perception of detection?
A. Conducting fraud audits
B. Establishing an effective fraud reporting program
C. Conducting proactive forensic audits
D. Conducting forensic audits (1 mark)
44. Which one of the following is NOT a principle pertaining to the information and communication component of the COSO’s Internal Control Integrated Framework?
A. The organisation communicates information, including objectives and responsibilities for internal control, necessary to support the functioning of internal control internally
B. The organisation implement control activities to put the other controls into action
C. The organisation obtains and uses relevant, quality information to support the functioning of internal control
D. None of the above (1 mark)
45. Which one of the following statements is NOT accurate in regard to the role of human resource in fraud prevention?
A. Human resource has responsibility for assessing and maintaining high level of loyalty, which is a fraud prevention measure
B. Human resource has responsibility for monitoring employee’s lack of morale, which is a fraud risk
C. Human resource can support in conducting fraud risk assessments
D. Human resource function is the employee’s fraud risk owner (1 mark)
46. Which one of the following is NOT a control that employers can put in place to mitigate fraud risks associated with employees’ “sense of entitlement”?
A. Training and awareness
B. Comprehensive code of ethics
C. Anti-fraud policy
D. Proactive forensic audit (1 mark)
47. Fraud prevention health check–up is an inexpensive tool that can be used to evaluate an organisation’s fraud prevention health. Which one of the following BEST describes the component that defines the integrity and culture of the organisation?
A. Process level controls
B. Control activities
C. Fraud risk tolerance and risk management policy
D. None of the above (1 mark)
48. According to B F Skinner, positive reinforcement measures are the most effective measures of modifying behaviour. Which one of the following BEST describes positive reinforcement measures?
A. Positive reinforcement measures help to enhance the internal controls
B. Segregation of duties are examples of positive reinforcement measures
C. Positive reinforcement measures enforce the internal controls
D. None of the above (1 mark)
49. Which one of the following should management NOT do to create an anti-fraud culture?
A. Develop a comprehensive compliance program
B. Demonstrate zero tolerance for fraud and unethical behaviour
C. Create an open-door policy environment
D. Define zero appetite for fraud risks (1 mark)
50. Which one of the following is NOT accurate in regard to forensic audit or fraud investigations assignments?
A. A Certified Fraud Examiner cannot accept a forensic audit assignment where he/she has a major interest
B. A Certified Fraud Examiner must be an accountant to conduct a forensic audit assignment
C. A Certified Fraud Examiner can accept a forensic audit assignment where he/she has a major interest
D. None of the above (1 mark)
51. Which one of the following statements is NOT accurate in regard to the independent auditor’s responsibility for fraud?
A. International Standard on Auditing (ISA 240) has put express responsibility on the auditor to detect fraud in the course of auditing financial statements
B. Auditors have a responsibility to identify fraud risks in all the processes
C. Auditors have a responsibility for detecting risks and red flags of fraud in all the processes
D. None of the above (1 mark)
52. Which one of the following does NOT describe the pressure leg of the fraud triangle?
A. “I am in a financial crisis”
B. “I need money to repay my debts”
C. “I have the technical skills and knowledge to help myself”
D. “I have an emergency; I have to help myself” (1 mark)
53. According to International Standard on Auditing (ISA 240), the auditor is only concerned with fraud that:
A. Is perpetrated management and employees
B. Causes misappropriation of assets
C. Causes misstatement in the financial statements
D. None of the above (1 mark)
54. Organisation crime theorists, found that businesses justify illegal or noncompliant conduct. Which one of the following statements is NOT a justification made the businesses for their behavior?
A. The purpose for violations is to retain employees’ jobs
B. Compliance with government regulations are too expensive
C. The damage is shared among a large number of consumers
D. The purpose for violation to remain profitable (1 mark)
55. According to COSO, an internal control system should be designed to provide reasonable assurance in the achievement of the organisation’s objectives. Which one of the following is NOT one of the objectives?
A. The effectiveness and efficiency of the organisation’s operations
B. To maximise income and profits
C. The organisation’s compliance with the laws and regulations.
D. None of the above (1 mark)
56. Which one of the following is NOT a core principle of sound corporate governance?
A. Responsibility
B. Confidentiality
C. Accountability
D. Transparency (1 mark)
57. Which one of the following parties, is responsible for providing oversight over the design and implementation of the organisation’s fraud prevention program?
A. The management
B. Internal auditors
C. External auditors
D. The board (1 mark)
58. Which one of the following parties, has responsibility for the design, implementation and monitoring of the effectiveness of the fraud risk management program?
A. Internal auditor
B. External auditor
C. Management
D. Compliance officer (1 mark)
59. Which one of the following statements is ACCURATE in regard to internal control system?
A. An effective internal control system can mitigate all types of fraud risks to an acceptable level
B. Red flags of fraud are sure indicators that fraud has occurred and the organisation should respond to such red flags conducting a fraud investigation
C. Absence of internal controls is not a root cause of fraud
D. Risks of fraud are sure indicators that fraud has occurred and therefore the organisation should conduct a fraud investigation (1 mark)
60. Which one of the following theories BEST describes the use of threat of criminal sanctions?
A. Prevention
B. Detection
C. Investigation
D. None of the above (1 mark)
61. Which one of the following parties in an organisation has responsibility for providing the first line of defense against fraud and corruption?
A. Internal auditor
B. Risk manager
C. Compliance manager
D. The risk owners (1 mark)
62. Organisations should make efforts to control corporate crime. Which one of the following is an example of the BEST
approach to control corporate crime?
A. Internal audit
B. Fraud hotlines
C. Voluntary changes in corporate culture
D. Government intervention (1 mark)
63. The directors of ABC Company decided to inflate the company’s revenue, and conceal expenditure, to show that the company has met the set profit targets. Which one of the following BEST describes the category of crime perpetrated the directors and senior management?
A. Organisational crime
B. Occupational crime
C. Economic crime
D. Fraudulent financial reporting (1 mark)
64. According to COSO, which one of the following is NOT accurate in regard to the control environment of an organisation?
A. It sets the tone at the top
B. Sets the moral and ethical tone of the organisation
C. It sets clear organisational objectives to enable assessment of risk associated with the achievement of the objectives
D. None of the above (1 mark)
65. Which one of the following statements is ACCURATE in regard to white-collar crime?
A. In white-collar crime cases like corruption, the higher the offender’s status, the more likely the individual will not be incarcerated
B. In white-collar crime cases, the higher an offender’s status, the more likely the individual will be convicted
C. In white-collar crime cases, the higher an offender’s status, the more likely the individual will not be found guilty
D. None of the above (1 mark)
66. The evaluation and communication of internal control deficiencies in a timely manner to those parties responsible for taking corrective action is a principle related to which component of COSO’s Internal Control-Integrated Framework?
A. Control environment
B. Control activities
C. Information and communication
D. Monitoring (1 mark)
67. Which one of the following parties has responsibility for the oversight of the organisation’s financial accounting, and audit matters?
A. The board
B. The internal auditors
C. Management
D. Audit committee (1 mark)
68. Which one of the following is ACCURATE in regard to an internal control system?
A. A strong and effective internal control system can eliminate fraud
B. Absence of internal controls is the major root cause of fraud
C. Red flags of fraud are evidence of fraud
D. An effective internal control system can reduce risks of fraud (1 mark)
69. Which one of the following is NOT accurate about white collar crimes?
A. White collar defendants are less likely to enter into a guilty plea
B. White collar defendants are more likely to enter into a guilty plea
C. White collar defendants are more likely to insist on a trial
D. None of the above (1 mark)
70. The theory that tries to prevent crime using the threat of criminal sanctions is referred to as .
A. Internal controls
B. Deterrence
C. Prevention
D. Compliance (1 mark)
71. Efforts to control corporate crime generally include which of the following initiatives?
A. Internal controls
B. Fraud hotlines
C. Positive reinforcement measure
D. None of the above (1 mark)
72. Several construction companies colluded to beat the competitive bidding process of a government entity. The bidders agreed that all the competent bidders refrain from submitting their bid and let only one of the bidders submit their bid. Which one of the following BEST describes the offence perpetrated the bidders?
A. Organisational crime
B. Occupational crime
C. Both occupational and organisational crime
D. White collar crime (1 mark)
73. According to COSO, which of the following is NOT accurate in regard to control environment of an organisation?
A. It provides anti-fraud and ethics compliance policies
B. It provides fraud training and awareness
C. It provides for system to put all the controls into action
D. It provides for consistent disciplinary measures (1 mark)
74. Which one of the following statements is ACCURATE in regard to white-collar crime?
A. In white-collar crime cases like corruption, the higher an offender’s status, the more likely the individual will be incarcerated
B. In white-collar crime cases, the higher an offender’s status, the more likely the individual will be convicted
C. In white-collar crime cases, the higher an offender’s status, the more likely the individual will not be imprisoned
D. None of the above (1 mark)
75. Which one of the following is an example of a fraud preventive control?
A. An internal audit of financial statements.
B. Segregation of duties between employees.
C. A surprise cash count a supervisor.
D. Diverting cash receipts to a personal account. (1 mark)
76. Which one of the following statements is NOT accurate in regard to a corporation’s board of director’s responsibility for fraud and corruption management?
A. The board of directors provide oversight over the design, implementation and monitoring of the fraud/corruption policies and strategy
B. The board of directors have the primary responsibility for fraud and corruption prevention
C. The board of directors have primary responsibility for evaluating the effectiveness of the fraud risk management program
D. All the above (1 mark)
77. An organisation’s corporate culture is effectively evaluated which of the following procedures.
A. A statement and action from the board and management, in regard to their zero tolerance for fraudulent and corrupt activities
B. Conducting continuous internal audit
C. Establishing strong internal controls
D. Establishing hard controls (1 mark)
78. According to B. F. Skinner’s behaviorist theories, destructive workplace behavior, such as fraud and corruption can be modified through which of the following?
A. Strong internal controls
B. Punishment
C. Soft controls
D. Basic hard controls (1 mark)
79. Strategy to control corporate crime that is designed to achieve conformity with the law providing economic incentives for voluntary compliance with the law and using administrative efforts to control violations is referred to as:
A. Deterrence
B. Prevention
C. Detection
D. None of the above (1 mark)
80. Which one of the following is not ACCURATE in regard to the OECD Principles of Corporate Governance?
A. Establishment of a substantive law, which governments should put in place to support good corporate governance practices
B. An emphasis on the importance of timely, accurate and transparent disclosure mechanisms
C. Recognition of the importance of the role of stakeholders in corporate governance
D. All of the above (1 mark)
81. Which one of the following is NOT an example of non-shareable financial need leg of the fraud triangle?
A. A need to do savings
B. Addiction problems
C. Gambling debts
D. Personal debts (1 mark)
82. An organisation’s ethics policy is an essential tool for fraud prevention. Which one of the following is NOT accurate in regard to an ethics policy?
A. The policy should be communicated to all company employees
B. In developing the policy, management should consider how various members of the organisation define success.
C. In developing the policy, management should consider the existing ethical culture set employees.
D. In developing the policy, management should consider the existing ethical tone set management
(1 mark)
83. Elias, a Certified Forensic Fraud Examiner, conducted a fraud examination at ABC Corporation where Lucy is a suspect of embezzlement of money. Elias later found out that Lucy is working for XYZ Corp, another client of his. Under most of the anti-fraud and other professional bodies’ Code of Professional Ethics, what should Elias do?
A. Elias should report the matter to the XYZ Corp board
B. Elias should report the matter to the XYZ Corp management
C. Elias should report the matter to the police
D. Elias should not inform XYZ company (1 mark)
84. All Professional organisations have codes of ethics. Which one of the following is NOT a purpose for the code of ethics for professional ethics?
A. Provide more specific solutions to professional ethical dilemmas, that might not be found under general ethical principles
B. Facilitate practical enforcement and profession-wide internal discipline
C. To serve as an ethical reference and benchmark
D. To provide ethical solutions for every situation that professionals may encounter (1 mark)
85. Which one of the following is NOT one of the legs of the Fraud Triangle?
A. Rationalisation
B. Perceived situational pressure
C. Opportunity
D. None of the above (1 mark)
86. Effective ownership and reporting structures within an organisation are necessary to ensure which of the following principles of corporate governance?
A. Transparency
B. Accountability
C. Responsibility
D. Integrity (1 mark)
87. A forensic fraud examiner while conducting an investigation is NOT permitted to express an opinion regarding which of the following?
A. The liability of the suspect
B. The involvement of the suspect
C. Failure to comply with international accounting standards
D. Failure to comply with international financial reporting standards (1 mark)
88. The corporate governance principle that pertains to the duty of internal parties to act in the best interest of the organisation is referred to as:
A. Accountability
B. Transparency
C. Fairness
D. Responsibility (1 mark)
89. According to the 2022 ACFE Report to the Nations, which one of the following asset misappropriation schemes was most common?
A. Fraudulent disbursement
B. Conflict of interest
C. Asset misappropriations
D. Embezzlement (1 mark)
90. Which one of the following procedures should the external auditor NOT do to obtain information for identifying the risks of material misstatement due to fraud?
A. Conduct interviews of the entity’s management only to obtain a more informative views on the risks of fraud
B. Conduct interview of fraud risk owners
C. Conduct interview of employees
D. All of the above (1 mark)
91. Which one of the following is NOT accurate in regard to occupational fraud?
A. Most of occupational offenders have a high sense of entitlement
B. Most of the occupational offenders have a sense of ownership
C. Most of the occupational offenders do not have prior criminal records
D. Most of the occupational offenders do not have a sense of ownership (1 mark)
92. The primary responsibility for evaluating the effectiveness of the compliance program rests with?
A. Internal auditor
B. Management
C. Board of directors
D. Compliance officer (1 mark)
93. Which one of the following controls is both preventive and detective anti-fraud control?
A. Fraud risk assessment
B. Analytical data review
C. Proactive forensic audits
D. Independent reconciliations (1 mark)
94. Preventive anti-fraud controls include all the following, EXCEPT?
A. Proactive forensic audit
B. Fraud awareness training
C. Hiring policies
D. Code of ethics (1 mark)
95. If an individual perceives a high possibility of being caught perpetrating fraud, he or she would be demotivated from committing fraud. Which one of the following procedures would discourage individuals in an organisation from engaging in fraudulent and corrupt activities?
A. Fraud detection audits
B. Fraud awareness training
C. An anti-fraud policy
D. Code of ethics (1 mark)
96. The primary responsibility for monitoring the effectiveness of the compliance program rests with?
A. Internal auditor
B. Management
C. Board of directors
D. Compliance officer (1 mark)
97. Which one of the following statements is ACCURATE in regard to an effective internal control system?
A. Well-designed and implemented internal control system is effective in fraud prevention
B. An effective internal control system must be well-designed, implemented and enforced
C. An effective internal control system must be well-designed, implemented and well enhanced
D. All the above (1 mark)
98. Which one of the following is NOT accurate in regard to fraud prevention?
A. Fraud prevention is made up of a set of rules and procedures which in their aggregate minimise the occurrence and detection of fraud
B. Fraud prevention is made up of a set of rules and procedures which in their aggregate minimise the occurrence of fraud while maximising the detection of fraud
C. An effective fraud prevention control system cannot eliminate fraud
D. An effective fraud prevention control system cannot eliminate fraud risks (1 mark)
99. Which one of the following is the primary foundation for the INTOSAI professional framework for auditing in the public sector?
A. The call for supreme audit institutions to develop their own independence standards
B. The call to keep government auditors employed the organisations that they audit
C. The call for supreme audit institutions to influence industry regulations
D. The call for enacted independence of government auditing institutions (1 mark)
100. Which one of the following is ACCURATE in regard to the objectives of good corporate governance?
A. Enhance the accuracy and reliability of the organisation’s financial reports
B. Detect financial misstatements whether caused errors or fraud
C. Provide reasonable assurance regarding the organisation’s compliance with applicable laws and regulations
D. Encourage the efficient use of resources and require accountability for the stewardship of the resources
(1 mark)
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