EMT Practice Test

1. Question Content...

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Question1: In the area of criminological theory, compliance is the theory that tries to prevent crime by providing economic incentives for voluntary conformity to the laws and using administrative efforts to control violations before they occur.

Question2: The International Organization of Securities Commissions' (IOSCO) Principles for Auditor Oversight states that auditor oversight should involve a regular review process designed to ascertain whether audit firms adhere to quality control policies and procedures.

Question3: Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?

Question4: Blue. Inc. is a specialty retailer of customized shipping containers. The company receives a very large order from Green Company, a new customer from a country that is known to have high corruption risks. Which of the following is MOST ACCURATE regarding the due diligence procedures Blue should perform on Green before proceeding with this transaction?

Question5: The availability of suitable targets, absence of capable guardians, and presence of motivated offenders are the three most important elements that influence crime according to which of the following criminological theories?

Question6: Management at ABC Corp. is assessing the company's ethical tone and how it affects the organization's fraud risk. To most effectively reinforce an anti-fraud culture, management should:

Question7: Jody has been working at ABC Corp. for ten years. He steals funds from the company and tells himself that the company owes it to him for his "unrewarded hard work and loyalty" This situation BEST illustrates which leg of the Fraud Triangle?

Question8: In response to a risk identified during a fraud risk assessment, management decides to implement additional internal control measures. This response is known as:

Question9: Which of the following is one of the recommendations made by the National Commission on Fraudulent Financial Reporting (the Treadway Commission) to reduce the probability of fraud in financial reports?

Question10: Which of the following is NOT an effective way to help prevent fraud through the organization's performance measurement and management programs?

Question11: The internal auditor's fraud-related responsibilities include which of the following?

Question12: During the course of a fraud examination. Stefan, an employee of Acme Inc., approaches Marten, a Certified Fraud Examiner (CFE) and fellow employee of Acme, and tells him that he knows of a major fraud being committed by the chief financial officer (CFO). However. Stefan says he can only provide details if Marten promises him absolute confidentiality. How should Marten respond?

Question13: Smith, a retail sales manager, wants to decrease the level of cash register over-and-short discrepancies among his sales team. According to behaviorist theories, which of the following options would be the most effective way for Smith to encourage his team members to keep their cash drawers in balance?

Question14: Which of the following criminological theories asserts that the three elements that have the most influence on crime are the availability of suitable targets, absence of capable guardians, and presence of motivated offenders?

Question15: According to the authors of Crimes of the Middle Classes, all of the following factors have contributed to the rising problem of economic crime EXCEPT:

Question16: Which of the following is among the board of directors' primary responsibilities related to fraud risk management?

Question17: Which of the following criminological theories states that individuals make a conscious decision to commit a crime and that crime can be deterred by reducing opportunities for criminal activity and increasing an individual's personal risk of being caught and punished?

Question18: Which of the following Is NOT Included In Ihe five fraud risk management principles described In Fraud Risk Management Guide, a joint publication by COSO and the ACFE?

Question19: Effective risk management involves balancing which of the following?

Question20: The findings in the 2020 Report to the Nations include which of the following?

Question21: White, a Certified Fraud Examiner (CFE). was hired to conduct a fraud examination. She did not find fraud, but. in White's opinion, there were several internal control deficiencies that, if not remediated, could facilitate the occurrence of fraud. Under the ACFE Code of Professional Ethics. White may include her opinion on the controls in her report to management

Question22: To be in compliance with the ACFE Code of Professional Ethics, fraud examiners must have:

Question23: Stevens, a Certified Fraud Examiner (CFE), was hired to conduct a fraud examination at ABC Company. His examination did not reveal any conclusive evidence that fraud had occurred or was occurring. Consequently, ABC's management asked Stevens to state in his official examination report that the organization is free of fraud as a means of assuring the board of directors that the company's anti-fraud controls were effective. Under the ACFE Code of Professional Ethics. Stevens is permitted to comply with management's request based on the findings of his examination.

Question24: Which of the following best describes the purpose of The National Commission on Fraudulent Financial Reporting (the Treadway Commission)?

Question25: Which of the following is FALSE regarding the fraud risk assessment team?

Question26: Which of the following is NOT one of the three general approaches used to control corporate crime?

Question27: According to modern criminological studies, which of the following is the determinant aspect of white-collar crime?

Question28: Which of the following is TRUE regarding prosecutions of white-collar criminals?

Question29: As part of her audit of ABC Corp . Rachel, a CPA. is identifying the risks of material misstatement due to fraud As part of this task, she should evaluate any unexpected relationships that she identified in performing analytical procedures.

Question30: Daniela, an independent Certified Fraud Examiner (CFE), was hired by Charles, executive director of a nonprofit organization, to investigate a straightforward embezzlement case. During the investigation, Daniela learns that Charles is involved in an unrelated fraud. Under the ACFE Code of Professional Ethics. Daniela should:

Question31: Which of the following statements Is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?

Question32: Fraud risks related to corruption include all of the following EXCEPT;

Question33: Management at ABC Corp. is assessing the company's ethical tone and how it affects the organization's fraud risk. To MOST EFFECTIVELY reinforce an anti-fraud culture, management should:

Question34: Which of the following is an example of organizational crime?

Question35: According to G20/OECD Principles of Corporate Governance (the Principles):

Question36: Which of the following statements is FALSE regarding an organization's fraud risk management program?

Question37: Open-door management policies are a fraud prevention mechanism that addresses which leg of the Fraud Triangle?

Question38: Which of the following Is one of the recommendations made by the National Commission on Fraudulent Financial Reporting (the Treadway Commission) to reduce the probability of fraud in financial reports?

Question39: Which of the following is one of the components of the Committee of Sponsoring Organizations of the Treactway Commission's (COSO) Enterprise Risk Management-Integrating with Strategy and Performance?

Question40: Consistently punishing perpetrators can be an effective fraud prevention mechanism

Question41: The Committee of Sponsoring Organizations of the Treadway Commission (COSO) defines____________ as "a process, effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance."

Question42: Black, a Certified Fraud Examiner (CFE). was hired to conduct a fraud examination. He did not find fraud, but. in Black's opinion, the controls he examined were deficient. Under the ACFE Code of Professional Ethics. Black is not permitted to express his opinion on the deficient controls.

Question43: Which of the following statements is FALSE regarding an organization's fraud risk management program1?

Question44: The internal auditor s fraud-related responsibilities include which of the following?

Question45: A government auditor is conducting a financial statement audit of a public-sector entity in accordance with the International Standards of Supreme Audit Institutions (ISSAI). Which of the following is TRUE regarding the auditor's consideration of fraud during this engagement?

Question46: International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the establishment of anti-fraud internal controls within an organization.

Question47: Professional auditing standards require that auditors incorporate an "element of unpredictability" in the selection of auditing procedures to be performed.

Question48: According to the differential reinforcement theory, behavior is weakened when positive rewards are gained or punishment is avoided

Question49: Which of the following is NOT a way that an organization's fraud risk assessment should be incorporated into the audit process''

Question50: Which of the following theories suggests that, when considering the possibility of violating a law. people are likely to ask themselves. "What will my spouse think if they find out?"

Question51: Employees should be kepi unaware that management is watching for lifestyle and behavior changes in staff members that might indicate fraud

Question52: Which of the following is TRUE regarding government auditors' responsibilities to report evidence of potential fraud uncovered during an audit of a public-sector organization's financial statements?

Question53: In response to an employee's failure to meet performance expectations, a manager demotes the employee to a junior-level position. This is an example of what type of behavioral response?

Question54: Which of the following is NOT included in G20/OECD Principles of Corporate Governance (the Principles)?

Question55: The existence of many specialized departments within a company generally decreases the overall risk of fraud within the organization.

Question56: Which of the following is NOT one of the three general approaches used to control corporate crime?

Question57: While, a Certified Fraud Examiner (CFE). was hired to conduct a fraud examination She did not find fraud, but. In White's opinion, there were several internal control deficiencies that, if not remediated, could facilitate the occurrence of fraud Under the ACFE Code of Professional Ethics. White may include her opinion on the controls in her report to management.

Question58: Which of the following Is one of the components of the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Enterprise Risk Management-Integrating with Strategy and Performance?

Question59: Benjamin, a Certified Fraud Examiner (CFE). was contacted regarding an engagement to investigate a complex money laundering case spanning numerous international jurisdictions and involving multiple cutting-edge technologies. Benjamin had previously attended a seminar on investigating money laundering schemes, but he had no other training or experience in such cases. However, he accepted the engagement and chose to conduct the work himself. Benjamin's conduct would likely be a violation of the ACFE Code of Professional Ethics.

Question60: The objectives of a fraud risk management program include

Question61: Which of the following is a best practice to ensure a successful fraud reporting program?

Question62: Employees should be kept unaware that management is watching for lifestyle and behavior changes In staff members that might indicate fraud.

Question63: A report by a fraud examiner is privileged from disclosure by anyone other than the client.

Question64: Which of the following statements regarding recommended vendor due diligence procedures is MOST ACCURATE?

Question65: Which of the following is FALSE regarding an organization's anti-fraud policy?

Question66: Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?

Question67: Which of the following statements about the fraud risk assessment process is MOST ACCURATE"?

Question68: Which of the following would MOST LIKELY be a violation of the ACFE Code of Professional Ethics?

Question69: Which of the following is an example of organizational crime?

Question70: For Its compliance program to be effective, an organization must perform procedures to ensure management hires only ethical Individuals who exercise a substantial measure of discretion In acting on the organization's behalf

Question71: According to Diane Vaughan. which of the following factors increases an organization s inherent inclination toward committing crime?

Question72: Which of the following Is NOT considered a conflict of Interest that Is prohibited under the ACFE Code of Professional Ethics?

Question73: According to the results of behavioral studies, such as those conducted by B. F. Skinner, application of punishment to undesired behavior typically results in which of the following?

Question74: According to the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control-integrated Framework (the Framework), there are five interrelated components of a company's internal control. Which of the following is NOT among these five components?

Question75: Julia is conducting a formal assessment of XYZ Corporation s ethical culture To which of the five components of the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control-Integrated Framework (the Framework) does her assessment pertain?

Question76: Having specialized departments within a company often increases the overall risk ot traud by the organization.

Question77: Risk management is focused on balancing the organization's___________with Its____________.

Question78: During the course of a fraud examination. While, an employee of the ABC Corp.. approaches Blue, a Certified Fraud Examiner (CFE), and tells Blue that she wishes to furnish information in confidence. Blue also is employed by the ABC Corp. Blue should: