EMT Practice Test

1. Question Content...

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Question1: According to Steve Albrecht's research,______is the most common personal characteristic motivating fraudsters, and ________ is the most common organization-environment factor motivating fraudsters.

Question2: XYZ, Inc. Is a specialty retailer of high-end ergonomic office furniture. The company receives a very large order from ABC Company, a new customer in a different country that wants to pay on credit. Which of the following is MOST ACCURATE regarding the due diligence procedures XYZ should perform on ABC before proceeding with this transaction?

Question3: "Crimes of the Middle Classes" finds that all the following factors have contributed to the rising problem of economic crime EXCEPT:

Question4: Which of the following is an example of organizational crime?

Question5: Which of the following is TRUE regarding the components of the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control-Integrated Framework (the Framework)?

Question6: Which of the following is NOT one of the three general approaches used to control corporate crime?

Question7: Which of the following would MOST LIKELY be a violation of the ACFE Code of Professional Ethics?

Question8: Mary is charged with implementing a fraud reporting program on behalf of her organization. Which of the following is a best practice that Mary should follow to ensure that the program is successful?

Question9: Which of the following is BEST classified as a type of external fraud risk?

Question10: 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.

Question11: Andrew, an internal auditor, is formalizing a process to identify and evaluate threats to his company's ability to achieve its objectives. Andrew's initiative BEST pertains to which component of the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control-Integrated Framework?

Question12: 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:

Question13: 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?

Question14: Which of the following is TRUE regarding International Standard on Auditing (ISA) 240?

Question15: Which of the following statements regarding best practices that organizations can take to protect and support whistleblowers is MOST ACCURATE?

Question16: Timothy, a new Certified Fraud Examiner (CFE), has been tasked with his first fraud examination engagement. To exercise appropriate professional skepticism as he conducts the engagement, Timothy should:

Question17: Which of the following statements is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?

Question18: The internal auditor's fraud-related responsibilities include which of the following?

Question19: 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?

Question20: According to criminologist Charles McCaghy, which of the following is the most compelling factor behind deviance by organizations?

Question21: During an external audit of an organization's financial statements. Peter, the external auditor, uncovers significant internal control deficiencies at the audit client's organization. He believes these deficiencies could result in a material misstatement of the financial statements. Which of the following should Peter do with regard to these findings?

Question22: During an external audit of an organization's financial statements. Elena, the external auditor, uncovers significant internal control deficiencies at the audit client's organization. She believes these deficiencies could result in a material misstatement of the financial statements. Which of the following should Elena do with regard to these findings?

Question23: 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:

Question24: Which of the following is TRUE regarding the G20/OECD Principles of Corporate Governance?

Question25: Which of the following Is TRUE regarding an organization's ethics program?

Question26: Which of the following is a best practice when assembling a fraud risk assessment team?

Question27: The objective of anti-fraud controls is to:

Question28: The findings in the 2020 Report to the Nations include which of the following?

Question29: Reputational damage is an indirect cost of fraud that can be difficult for organizations to calculate.

Question30: Mario is charged with implementing a fraud reporting program on behalf of his organization. Which of the following is a best practice that Mario should follow to ensure that the program is successful?

Question31: International Standard on Auditing (ISA) 240 establishes auditors as being primarily responsible for the establishment of anti-fraud internal controls within an organization.

Question32: Article II of the ACFE Code of Professional Ethics prohibits illegal or unethical conduct, but It allows exceptions for unknowing violations of the law.

Question33: According to the Committee of Sponsoring Organizations of the Treadway Commission (COSO), internal control is defined as:

Question34: 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."

Question35: Which of the following Is FALSE regarding a fraud risk assessment?

Question36: Which of the following is TRUE regarding the internal audit function's reporting responsibilities pertaining to fraud?

Question37: Harry is an internal auditor with ABC Company. Harry's supervisor, the chief audit executive (CAE), is the fraud risk assessment sponsor and has tasked Harry with drafting an email communication regarding ABC's upcoming fraud risk assessment process. Which of the following is a best practice that Harry should implement?

Question38: Which of the following statements regarding recommended vendor due diligence procedures is MOST ACCURATE?

Question39: Fraud risks related to corruption include all of the following EXCEPT;

Question40: Patrick is conducting an external audit of a company in a jurisdiction that is subject to International Standards on Auditing (ISAs). While undertaking his audit procedures, he discovers evidence that senior management has been fraudulently manipulating the financial statements. Which of the following is Patrick's BEST response to these findings?

Question41: Green, a Certified Fraud Examiner (CFE). had an ethical dilemma regarding her business contract with her professional partners. Which of the following sources of guidance would be considered the lowest level of reference to help Green in determining the most ethical course of action?

Question42: Which of the following is NOT explicitly prohibited by the ACFE Code of Professional Ethics?

Question43: Which of the following is NOT one of the three general approaches used to control corporate crime?

Question44: Which of the following is TRUE regarding prosecutions of white-collar criminals?

Question45: According to Diane Vaughan, which of the following factors increases an organization's inherent inclination toward committing crime?

Question46: 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:

Question47: 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?

Question48: Having specialized departments within a company often increases the overall risk ot traud by the organization.

Question49: Susannah Is conducting an external audit of a company In a jurisdiction that is subject to International Standards on Auditing (ISAs). While undertaking her audit procedures, she discovers evidence that senior management has been fraudulently manipulating the financial statements. Which of the following is Susannah's BEST response to these findings?

Question50: The objectives of a fraud risk management program include:

Question51: Which of the following statements regarding monitoring employees for warning signs of fraud is MOST ACCURATE?

Question52: According to the differential reinforcement theory, behavior is strengthened when which of the following is applied?

Question53: Employee anti-fraud education should:

Question54: According to International Organization for Standardization (ISO) 31000:2018, an effective and efficient risk management program contains all of the following principles EXCEPT:

Question55: Which of the following is a detective anti-fraud control?

Question56: Which of the following principles of corporate governance pertains to the duty of the organization to act in the best interest of society?

Question57: Which of the following is the MOST EFFECTIVE way for management to respond to incidents of fraud within an organization?

Question58: According to the Committee of Sponsoring Organizations of the Treadway Commission (COSO).________Is
"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."

Question59: Which of the following is TRUE regarding International Standard on Auditing (ISA) 240?

Question60: Which of the following is FALSE regarding a fraud risk assessment?

Question61: Which of the following scenarios is LEAST LIKELY to be considered a conflict of interest that is prohibited under the ACFE Code of Professional Ethics?

Question62: Which of the following is NOT considered a conflict of interest that is prohibited under the ACFE Code of Professional Ethics?

Question63: 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?

Question64: Which of the following statements Is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?

Question65: Josie is conducting an external audit of a company in a jurisdiction that is subject to International Standards on Auditing (ISAs). While conducting her audit procedures, she discovers evidence that Carissa, the company' s chief financial officer, has been fraudulently manipulating the financial statements. Which of the following is Josie's BEST response to these findings?

Question66: 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?

Question67: The internal auditor's fraud-related responsibilities include which of the following?

Question68: During an external audit, the audit team identifies evidence that management has Intentionally manipulated the organization's reported revenue amount However, the amount of the resulting misstatement does not meet the quantitative materiality threshold for the audit. Which of the following is TRUE regarding this situation?

Question69: Which of the following scenarios is the MOST ACCURATE representation of organizational crime?

Question70: Maria conducted a fraud examination that led to a valid confession of guilt from Rita. In Maria's verbal report to her superiors, she stated that, in her opinion. "Rita is guilty of embezzlement." Maria has just violated the ACFE Code of Professional Ethics.

Question71: Which of the following Is TRUE regarding the reporting of the fraud risk assessment results?

Question72: Which of the following is among the board of directors' primary responsibilities related to fraud risk management?

Question73: 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?

Question74: Which of the following statements is MOST ACCURATE regarding best practices that organizations can take to protect and support whistleblowers?

Question75: Ian is drafting a report containing the results of his company's fraud risk assessment process. To be MOST EFFECTIVE, Ian's report should:

Question76: Criminologist Charles McCaghy has stated that regulatory pressure is the single most compelling factor behind deviance by organizations.

Question77: Which of the following is FALSE regarding the process of defining the objective of the fraud risk management program?

Question78: Reporting known incidents of fraud to law enforcement can be an effective fraud prevention mechanism.

Question79: Cho, an internal auditor, and Pierre, a sales manager, have had several disagreements about the sales tactics used by Pierre's team. Cho has just been told that she will lead the company's fraud risk assessment. During the fraud risk assessment, Cho should:

Question80: 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?

Question81: Which of the following is FALSE regarding the fraud risk assessment learn?

Question82: 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.

Question83: 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?

Question84: Which of the following is one of the four recommendations made by the National Commission on Fraudulent Financial Reporting (the Treadway Commission) to reduce the probability of fraud in financial reports?

Question85: The existence of many specialized departments within a company generally decreases the overall risk of fraud within the organization.

Question86: For its compliance program to be effective, an organization must promote the program through appropriate incentives for compliance.

Question87: The Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Enterprise Risk Management-Integrating with Strategy and Performance defines what as 'the continual iterative process of obtaining information and sharing it throughout the entity'?

Question88: Eliece, a Certified Fraud Examiner (CFE), and Jewel are employees at Silver Inc. Jewel informs Eliece that she has knowledge of a potential financial statement fraud but does not feel comfortable sharing this information unless Eliece can promise that she will keep it confidential. How should Eliece respond?

Question89: Helene has been working at WPX Corp. for nine years. She takes some of the company's products from the warehouse and sells them online. Helene tells herself that the company owes it to her for her "years of underpaid service." This situation BEST illustrates which component of the Fraud Triangle?

Question90: During a fraud risk assessment, the assessment team determines that it would like to observe the interactions among several employees as they collectively discuss the organization's current fraud awareness training.
Which of the following techniques would be MOST HELPFUL for the team to use in gathering this information?

Question91: Which of the following is TRUE regarding an organization's ethics program?

Question92: Warren wants to decrease the amount of cash register discrepancies among the cashiers at his small business.
According to behaviorist theories, which of the following options would be the MOST EFFECTIVE way for Warren to encourage the cashiers to reduce their discrepancies and keep their cash drawers balanced?

Question93: Aqua Corp.'s board of directors is meeting to discuss fraud risk management within the organization. Which of the following activities is among the board of directors' primary responsibilities related to fraud risk management for the company?

Question94: Which of the following mechanisms can help alleviate the pressure on employees to commit fraud?

Question95: Glenda. an internal auditor, and Brldgette. an accounts receivable clerk, have had several heated disagreements over accounting procedures and policies. Glenda has just been told that she will be the lead on the company's fraud risk assessment. During the fraud risk assessment. Glenda should:

Question96: Rosie, a Certified Fraud Examiner (CFE), conducted a fraud examination for her company that led to a confession of guilt from Dean. Which of the following statements in Rosie's verbal report to management would violate the ACFE Code of Professional Ethics?

Question97: In the context of a fraud examination, integrity requires all of the following EXCEPT:

Question98: Which of the following is LEAST LIKELY to be a factor that directors and management should consider when developing a corporate governance framework for an organization?

Question99: A report by a fraud examiner is privileged from disclosure by anyone other than the client.

Question100: Based on research regarding the criminogenic nature of organizations, employees with strong personal values and ethics will always disobey a superior's direct order to engage in fraudulent behavior, despite an inherent desire to obey authority figures.

Question101: Jane, a Certified Fraud Examiner (CFE), was hired lo conduct a fraud examination at XYZ Company Her examination did not reveal any conclusive evidence that fraud had occurred or was occurring Consequently.
XYZ's management asked Jane to state in her official examination report that the company is free of fraud as a means of assuring the board of directors that the company's anti-fraud controls were effective. The ACFE Code of Professional Ethics prohibits Jane from complying with management's request.

Question102: In Ihe context of fraud examination, integrity requires all of the following EXCEPT: