{"id":23134,"date":"2026-09-26T11:58:16","date_gmt":"2026-09-26T11:58:16","guid":{"rendered":"https:\/\/www.examlabs.com\/certification\/?p=23134"},"modified":"2026-09-26T11:58:16","modified_gmt":"2026-09-26T11:58:16","slug":"acfe-cfe-fraud-prevention-practice-test-questions-and-exam-dumps-part8-q141-160","status":"publish","type":"post","link":"https:\/\/www.examlabs.com\/certification\/acfe-cfe-fraud-prevention-practice-test-questions-and-exam-dumps-part8-q141-160\/","title":{"rendered":"ACFE CFE – Fraud Prevention Practice Test Questions and Exam Dumps Part8 Q141-160"},"content":{"rendered":"

View Full <\/b>ACFE CFE – Fraud Prevention Exam Dumps<\/b><\/a> and Practice Test Dumps.<\/b><\/p>\n


\n<\/b>Question 141. What should a fraud risk assessment consider about management override<\/b><\/p>\n

    \n
  1. <\/b> It eliminates the need for controls<\/span><\/li>\n
  2. <\/b> Senior authority can bypass normal controls<\/span><\/li>\n
  3. <\/b> It affects only external auditors<\/span><\/li>\n
  4. <\/b> It occurs only in small organizations<\/span><\/li>\n<\/ol>\n

    Correct Answer: 2. Senior authority can bypass normal controls<\/b><\/p>\n

    Explanation:<\/b><\/p>\n

    Management override is important in fraud risk assessment because individuals with sufficient authority may be able to bypass controls that work effectively for ordinary employees. They might approve unusual transactions, influence subordinates, change records, or authorize exceptions. Organizations should consider where management has this ability and establish independent oversight, monitoring, or other safeguards. Strong controls at lower levels cannot fully protect an organization if executives can circumvent them without scrutiny. Management responsibilities, internal control, corporate governance, and fraud risk assessment are all part of the current CFE Fraud Prevention and Deterrence body of knowledge.<\/span><\/p>\n

    Question 142. What is the purpose of fraud risk assessment frameworks<\/b><\/p>\n

      \n
    1. <\/b> Replace every internal control<\/span><\/li>\n
    2. <\/b> Guarantee fraud detection<\/span><\/li>\n
    3. <\/b> Eliminate professional judgment<\/span><\/li>\n
    4. <\/b> Provide a structured assessment process<\/span><\/li>\n<\/ol>\n

      Correct Answer: 4. Provide a structured assessment process<\/b><\/p>\n

      Explanation:<\/b><\/p>\n

      Fraud risk assessment frameworks provide a consistent structure for identifying fraud schemes, evaluating likelihood and impact, reviewing controls, determining residual risk, and selecting appropriate responses. A framework helps ensure that important areas are not overlooked and makes assessments easier to repeat and compare over time. It does not remove the need for professional judgment because fraud risks differ among organizations and industries. The current Fraud Examiners Manual specifically includes fraud risk assessment frameworks, identified fraud risks, residual risk responses, reporting, and tools within the Fraud Prevention and Deterrence section.<\/span><\/p>\n

      Question 143. What should be done before beginning a formal fraud risk assessment<\/b><\/p>\n

        \n
      1. <\/b> Prepare the organization and define the process<\/span><\/li>\n
      2. <\/b> Eliminate all existing controls<\/span><\/li>\n
      3. <\/b> Investigate every employee<\/span><\/li>\n
      4. <\/b> Cancel current audits<\/span><\/li>\n<\/ol>\n

        Correct Answer: 1. Prepare the organization and define the process<\/b><\/p>\n

        Explanation:<\/b><\/p>\n

        Preparing the organization helps create a useful and efficient fraud risk assessment. Management should define objectives, scope, participants, responsibilities, information needs, and the method that will be used. Participants should understand why the assessment is being conducted and should be encouraged to discuss realistic fraud scenarios. Poor preparation can produce incomplete results or cause participants to focus only on known incidents. The current Fraud Examiners Manual specifically includes preparing the company for a fraud risk assessment as a separate topic before assessment frameworks and risk responses are addressed.<\/span><\/p>\n

        Question 144. What should management do after fraud risks are identified<\/b><\/p>\n

          \n
        1. <\/b> Archive them without review<\/span><\/li>\n
        2. <\/b> Transfer all responsibility to audit<\/span><\/li>\n
        3. <\/b> Evaluate controls and appropriate responses<\/span><\/li>\n
        4. <\/b> Assume all risks are equal<\/span><\/li>\n<\/ol>\n

          Correct Answer: 3. Evaluate controls and appropriate responses<\/b><\/p>\n

          Explanation:<\/b><\/p>\n

          Identifying a fraud risk is only the beginning of risk management. Management should determine which controls address the risk, whether those controls are adequately designed and operating, and what residual exposure remains. If the remaining risk is unacceptable, an additional response should be selected. This process turns a list of possible fraud schemes into practical risk management decisions. The current Fraud Examiners Manual specifically includes addressing identified fraud risks and responding to residual fraud risks within its Fraud Risk Assessment section.<\/span><\/p>\n

          Question 145. What is a key goal when presenting fraud risk assessment results<\/b><\/p>\n

            \n
          1. <\/b> Make findings understandable and actionable<\/span><\/li>\n
          2. <\/b> Include every raw data point<\/span><\/li>\n
          3. <\/b> Avoid assigning responsibility<\/span><\/li>\n
          4. <\/b> Hide high risk findings<\/span><\/li>\n<\/ol>\n

            Correct Answer: 1. Make findings understandable and actionable<\/b><\/p>\n

            Explanation:<\/b><\/p>\n

            Fraud risk assessment results should be communicated in a way that helps management and governance personnel understand important exposures and decide what actions are needed. A report should emphasize significant schemes, control weaknesses, residual risks, responsible parties, and recommended actions rather than overwhelming readers with unnecessary detail. Clear communication increases the chance that assessment findings will actually influence decisions and remediation. The current Fraud Examiners Manual includes both reporting the results and making an impact with the fraud risk assessment as specific topics.<\/span><\/p>\n

            Question 146. What is the purpose of integrating fraud risks into audit planning<\/b><\/p>\n

              \n
            1. <\/b> Remove auditor independence<\/span><\/li>\n
            2. <\/b> Replace fraud risk assessment<\/span><\/li>\n
            3. <\/b> Eliminate management responsibility<\/span><\/li>\n
            4. <\/b> Direct audit attention toward important exposures<\/span><\/li>\n<\/ol>\n

              Correct Answer: 4. Direct audit attention toward important exposures<\/b><\/p>\n

              Explanation:<\/b><\/p>\n

              Fraud risk assessment information can help auditors identify areas where fraud exposure or control weakness justifies additional audit attention. High risk processes might receive greater testing, more experienced staff, or different audit procedures. This does not mean internal audit takes ownership of management’s fraud risks. Management remains responsible for operating controls and managing risk, while auditors provide independent evaluation. The current Fraud Examiners Manual specifically includes the relationship between fraud risk assessment and the audit process within its Fraud Prevention and Deterrence section.<\/span><\/p>\n

              Question 147. What should a fraud risk management program establish<\/b><\/p>\n

                \n
              1. <\/b> Only investigation procedures<\/span><\/li>\n
              2. <\/b> Roles responsibilities and risk processes<\/span><\/li>\n
              3. <\/b> Only financial targets<\/span><\/li>\n
              4. <\/b> Only external reporting rules<\/span><\/li>\n<\/ol>\n

                Correct Answer: 2. Roles responsibilities and risk processes<\/b><\/p>\n

                Explanation:<\/b><\/p>\n

                An effective fraud risk management program should establish how fraud risks are identified, assessed, addressed, monitored, and communicated. It should also clarify the responsibilities of management, governance personnel, compliance, internal audit, and other relevant functions. Without defined ownership and processes, fraud risk activities may be inconsistent or ignored. The current Fraud Examiners Manual specifically covers fraud risk management principles, development steps, program components, responsibility for fraud risk, and program objectives. These elements create a repeatable structure rather than relying on informal responses after problems arise.<\/span><\/p>\n

                Question 148. What is the purpose of the fraud risk management funnel concept<\/b><\/p>\n

                  \n
                1. <\/b> Replace the Fraud Triangle<\/span><\/li>\n
                2. <\/b> Measure audit fees<\/span><\/li>\n
                3. <\/b> Connect fraud drivers with risk management responses<\/span><\/li>\n
                4. <\/b> Eliminate risk monitoring<\/span><\/li>\n<\/ol>\n

                  Correct Answer: 3. Connect fraud drivers with risk management responses<\/b><\/p>\n

                  Explanation:<\/b><\/p>\n

                  The Fraud Examiners Manual includes the Fraud Triangle and fraud risk within a fraud risk management funnel concept. The idea connects understanding why fraud can occur with the organization’s process for identifying and managing the resulting risks. Pressure, opportunity, and rationalization help explain fraud risk factors, while governance, controls, monitoring, and risk responses help reduce exposure. This broader view is useful because fraud prevention is not only about identifying individual offenders. Organizations also need systems that reduce opportunities and manage the conditions that can support misconduct.<\/span><\/p>\n

                  Question 149. What should third party fraud monitoring focus on<\/b><\/p>\n

                    \n
                  1. <\/b> Only contract price<\/span><\/li>\n
                  2. <\/b> Only vendor size<\/span><\/li>\n
                  3. <\/b> Only payment speed<\/span><\/li>\n
                  4. <\/b> Changes and warning signs during the relationship<\/span><\/li>\n<\/ol>\n

                    Correct Answer: 4. Changes and warning signs during the relationship<\/b><\/p>\n

                    Explanation:<\/b><\/p>\n

                    Third party due diligence should not end when a vendor or business partner is initially approved. Ownership, financial condition, reputation, conflicts, payment requests, sanctions exposure, or business practices can change over time. Ongoing monitoring helps organizations identify new warning signs and reassess whether the relationship still fits their risk tolerance. Controls should be proportionate to the nature and risk of the third party. The current Fraud Examiners Manual specifically includes managing third party fraud risks within the Fraud Risk Management section.<\/span><\/p>\n

                    Question 150. What is the main purpose of documenting fraud risk responses<\/b><\/p>\n

                      \n
                    1. <\/b> Create accountability and track action<\/span><\/li>\n
                    2. <\/b> Eliminate all residual risk<\/span><\/li>\n
                    3. <\/b> Replace governance review<\/span><\/li>\n
                    4. <\/b> Avoid monitoring<\/span><\/li>\n<\/ol>\n

                      Correct Answer: 1. Create accountability and track action<\/b><\/p>\n

                      Explanation:<\/b><\/p>\n

                      Documenting fraud risk responses establishes what action management has chosen, who owns the action, when it should be completed, and how progress will be monitored. Without documentation, agreed improvements can be forgotten or delayed. Documentation also supports later reassessment by showing why management accepted, mitigated, transferred, or avoided a particular risk. Fraud risk management is intended to be a repeatable process rather than an informal discussion. The current Fraud Examiners Manual specifically addresses identified risk responses, residual fraud risk, management responsibility, and program development.<\/span><\/p>\n

                      Question 151. What does complete reporting require from a fraud examiner<\/b><\/p>\n

                        \n
                      1. <\/b> Reporting only evidence supporting the allegation<\/span><\/li>\n
                      2. <\/b> Removing unfavorable evidence<\/span><\/li>\n
                      3. <\/b> Including material information needed for a fair understanding<\/span><\/li>\n
                      4. <\/b> Disclosing every confidential record publicly<\/span><\/li>\n<\/ol>\n

                        Correct Answer: 3. Including material information needed for a fair understanding<\/b><\/p>\n

                        Explanation:<\/b><\/p>\n

                        Complete reporting requires a fraud examiner to include material matters necessary for readers to understand the findings fairly and accurately. A report can be misleading if significant contrary evidence or important limitations are intentionally omitted. Complete reporting does not mean every document or minor fact must appear in the final report. Instead, the examiner should exercise professional judgment about what information is material to the conclusions. The current Fraud Examiners Manual lists complete reporting of material matters as an explicit requirement within the ACFE Code of Professional Ethics.<\/span><\/p>\n

                        Question 152. What should an ethical fraud examiner do with evidence favorable to the subject<\/b><\/p>\n

                          \n
                        1. <\/b> Destroy it<\/span><\/li>\n
                        2. <\/b> Consider it objectively<\/span><\/li>\n
                        3. <\/b> Hide it from reviewers<\/span><\/li>\n
                        4. <\/b> Treat it as irrelevant automatically<\/span><\/li>\n<\/ol>\n

                          Correct Answer: 2. Consider it objectively<\/b><\/p>\n

                          Explanation:<\/b><\/p>\n

                          Fraud examination should seek the truth rather than merely prove an allegation. Evidence that supports the subject’s explanation must therefore be evaluated along with evidence that suggests misconduct. Ignoring exculpatory information can create confirmation bias and lead to unsupported conclusions. Professional ethics require integrity, diligence, competence, and a reasonable evidential basis for opinions. These responsibilities are explicitly included in the current Fraud Examiners Manual under the ACFE Code of Professional Ethics.<\/span><\/p>\n

                          Question 153. What is the main purpose of the CFE Code of Professional Standards<\/b><\/p>\n

                            \n
                          1. <\/b> Set customer prices<\/span><\/li>\n
                          2. <\/b> Replace all laws<\/span><\/li>\n
                          3. <\/b> Determine corporate strategy<\/span><\/li>\n
                          4. <\/b> Establish professional expectations for CFE work<\/span><\/li>\n<\/ol>\n

                            Correct Answer: 1. Establish professional expectations for CFE work<\/b><\/p>\n

                            Explanation:<\/b><\/p>\n

                            The CFE Code of Professional Standards establishes professional expectations for Certified Fraud Examiners when performing fraud related work. It complements the ACFE Code of Professional Ethics by providing standards that support professional conduct and quality. CFEs must still comply with applicable laws, employer requirements, and engagement specific obligations. The current Fraud Examiners Manual includes a separate section for the CFE Code of Professional Standards immediately after its ethics material, demonstrating its importance within the Fraud Prevention and Deterrence body of knowledge.<\/span><\/p>\n

                            Question 154. What is the best reason to maintain fraud examiner competence<\/b><\/p>\n

                              \n
                            1. <\/b> Avoid documenting work<\/span><\/li>\n
                            2. <\/b> Replace evidence with experience<\/span><\/li>\n
                            3. <\/b> Perform assignments reliably as risks evolve<\/span><\/li>\n
                            4. <\/b> Eliminate ethical responsibilities<\/span><\/li>\n<\/ol>\n

                              Correct Answer: 3. Perform assignments reliably as risks evolve<\/b><\/p>\n

                              Explanation:<\/b><\/p>\n

                              Fraud methods, technology, laws, business processes, and investigative techniques change continually. A fraud examiner must maintain and improve professional competence so work remains reliable and relevant. Continuing learning can involve training, reading, professional experience, technical updates, and study of new fraud risks. Competence also includes recognizing when specialist assistance is required. The current ACFE Code of Professional Ethics separately addresses integrity and competence and professional improvement, showing that ongoing development is a professional responsibility rather than an optional benefit.<\/span><\/p>\n

                              Question 155. What should a board do with significant unresolved fraud risks<\/b><\/p>\n

                                \n
                              1. <\/b> Ignore them until a loss occurs<\/span><\/li>\n
                              2. <\/b> Ensure appropriate management attention and oversight<\/span><\/li>\n
                              3. <\/b> Transfer them automatically to auditors<\/span><\/li>\n
                              4. <\/b> Remove them from reports<\/span><\/li>\n<\/ol>\n

                                Correct Answer: 2. Ensure appropriate management attention and oversight<\/b><\/p>\n

                                Explanation:<\/b><\/p>\n

                                The board or appropriate governance committee should understand significant fraud exposures and ensure that management is responding appropriately. Governance oversight does not mean directors manage daily controls themselves. Instead, they should challenge management, request information, review major deficiencies, and ensure unresolved risks receive adequate attention. This is especially important when the risk involves senior executives or management override. The current Fraud Examiners Manual includes the role of corporate governance in fighting fraud, governance principles, management responsibilities, and fraud risk management.<\/span><\/p>\n

                                Question 156. What is the best reason to document fraud risk acceptance<\/b><\/p>\n

                                  \n
                                1. <\/b> Eliminate the risk<\/span><\/li>\n
                                2. <\/b> Avoid future monitoring<\/span><\/li>\n
                                3. <\/b> Clarify that management knowingly retained the exposure<\/span><\/li>\n
                                4. <\/b> Transfer ownership to external audit<\/span><\/li>\n<\/ol>\n

                                  Correct Answer: 3. Clarify that management knowingly retained the exposure<\/b><\/p>\n

                                  Explanation:<\/b><\/p>\n

                                  When management accepts a fraud risk, documenting the decision shows that the exposure was considered rather than overlooked. Documentation can describe the risk, existing controls, expected impact, rationale for acceptance, responsible owner, and monitoring expectations. Acceptance does not eliminate the risk, and changing conditions may require reassessment later. Clear documentation strengthens accountability and governance because stakeholders can understand why management chose not to add further controls. Residual fraud risk responses and fraud risk management responsibilities are explicitly included in the current Fraud Examiners Manual.<\/span><\/p>\n

                                  Question 157. What should happen when a fraud prevention procedure becomes outdated<\/b><\/p>\n

                                    \n
                                  1. <\/b> Keep it unchanged<\/span><\/li>\n
                                  2. <\/b> Remove all controls<\/span><\/li>\n
                                  3. <\/b> Stop monitoring<\/span><\/li>\n
                                  4. <\/b> Update it to address current risks<\/span><\/li>\n<\/ol>\n

                                    Correct Answer: 4. Update it to address current risks<\/b><\/p>\n

                                    Explanation:<\/b><\/p>\n

                                    Fraud prevention procedures can become outdated as technology, personnel, business processes, vendors, and fraud methods change. A control that once addressed an important vulnerability might later become ineffective or unnecessary. Management should therefore monitor the control environment and update prevention measures when circumstances change. Fraud prevention is an ongoing process rather than a one time project. The current Fraud Examiners Manual includes procedures to prevent fraud, fraud risk assessment, fraud risk management, and data analytics, all of which support continual adaptation to changing risks.<\/span><\/p>\n

                                    Question 158. What is the purpose of an anti fraud policy decision matrix<\/b><\/p>\n

                                      \n
                                    1. <\/b> Help determine consistent responses to different incidents<\/span><\/li>\n
                                    2. <\/b> Replace professional judgment completely<\/span><\/li>\n
                                    3. <\/b> Eliminate investigation<\/span><\/li>\n
                                    4. <\/b> Set employee salaries<\/span><\/li>\n<\/ol>\n

                                      Correct Answer: 2. Help determine consistent responses to different incidents<\/b><\/p>\n

                                      Explanation:<\/b><\/p>\n

                                      A fraud policy decision matrix provides a structured reference for determining how various suspected or confirmed fraud matters should be handled. It can help organizations decide appropriate escalation, investigation, disciplinary, reporting, or legal responses based on the nature and seriousness of the matter. The matrix supports consistency but does not eliminate professional judgment because individual circumstances can differ. The current Fraud Examiners Manual includes a Fraud Policy Decision Matrix within the Fraud Prevention Programs section alongside anti fraud policies and ethics programs.<\/span><\/p>\n

                                      Question 159. What should ethics guidance help a fraud examiner resolve<\/b><\/p>\n

                                        \n
                                      1. <\/b> Product pricing<\/span><\/li>\n
                                      2. <\/b> Sales quotas<\/span><\/li>\n
                                      3. <\/b> Professional conduct questions<\/span><\/li>\n
                                      4. <\/b> Marketing strategy<\/span><\/li>\n<\/ol>\n

                                        Correct Answer: 3. Professional conduct questions<\/b><\/p>\n

                                        Explanation:<\/b><\/p>\n

                                        Ethics guidance helps fraud examiners evaluate how they should behave when professional responsibilities, personal interests, confidentiality, competence, legal obligations, or competing duties create difficult decisions. Ethical standards support consistent professional judgment and protect the credibility of fraud examination work. The current Fraud Examiners Manual includes ethics as a dedicated topic and separately addresses professionalism, conflicts of interest, competence, court orders, evidence, confidentiality, reporting, and professional improvement. These topics demonstrate that technical fraud knowledge must be accompanied by responsible professional conduct.<\/span><\/p>\n

                                        Question 160. What is the best overall purpose of fraud prevention and deterrence<\/b><\/p>\n

                                          \n
                                        1. <\/b> Understand fraud drivers and reduce organizational exposure<\/span><\/li>\n
                                        2. <\/b> Guarantee that no fraud occurs<\/span><\/li>\n
                                        3. <\/b> Replace investigations completely<\/span><\/li>\n
                                        4. <\/b> Transfer all responsibility to auditors<\/span><\/li>\n<\/ol>\n

                                          Correct Answer: 1. Understand fraud drivers and reduce organizational exposure<\/b><\/p>\n

                                          Explanation:<\/b><\/p>\n

                                          Fraud prevention and deterrence combine understanding why misconduct occurs with organizational practices designed to reduce the likelihood and impact of fraud. The current Fraud Examiners Manual covers financial crime, corporate governance, management and auditor responsibilities, fraud prevention programs, fraud risk assessment, fraud risk management, and ethics. These subjects show that fraud prevention depends on an integrated framework rather than one isolated control. The ACFE’s updated CFE Exam launched in June 2026 to reflect current fraud examination knowledge and the evolving fraud risk environment.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

                                          View Full ACFE CFE – Fraud Prevention Exam Dumps and Practice Test Dumps. Question 141. What should a fraud risk assessment consider about management override It eliminates the need for controls Senior authority can bypass normal controls It affects only external auditors It occurs only in small organizations Correct Answer: 2. Senior authority can bypass […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1648,1647],"tags":[],"_links":{"self":[{"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/posts\/23134"}],"collection":[{"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/comments?post=23134"}],"version-history":[{"count":1,"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/posts\/23134\/revisions"}],"predecessor-version":[{"id":23135,"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/posts\/23134\/revisions\/23135"}],"wp:attachment":[{"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/media?parent=23134"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/categories?post=23134"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/tags?post=23134"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}