{"id":23152,"date":"2026-09-26T12:00:31","date_gmt":"2026-09-26T12:00:31","guid":{"rendered":"https:\/\/www.examlabs.com\/certification\/?p=23152"},"modified":"2026-09-26T12:00:31","modified_gmt":"2026-09-26T12:00:31","slug":"acfe-cfe-fraud-prevention-practice-test-questions-and-exam-dumps-part17-q321-340","status":"publish","type":"post","link":"https:\/\/www.examlabs.com\/certification\/acfe-cfe-fraud-prevention-practice-test-questions-and-exam-dumps-part17-q321-340\/","title":{"rendered":"ACFE CFE – Fraud Prevention Practice Test Questions and Exam Dumps Part17 Q321-340"},"content":{"rendered":"

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


\n<\/b>Question 321. What does rational choice theory suggest about fraud<\/b><\/p>\n

    \n
  1. <\/b> Fraud is always accidental<\/span><\/li>\n
  2. <\/b> Offenders may weigh expected benefits against risks<\/span><\/li>\n
  3. <\/b> Fraud occurs only in large companies<\/span><\/li>\n
  4. <\/b> Controls never affect behavior<\/span><\/li>\n<\/ol>\n

    Correct Answer: 2. Offenders may weigh expected benefits against risks<\/b><\/p>\n

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

    Rational choice theory suggests that an individual may consider the expected benefits of misconduct against the perceived likelihood and consequences of detection. This does not mean every fraud decision is perfectly logical. It means perceived rewards and risks can influence behavior. Organizations can use this insight when designing deterrence measures. Effective monitoring, meaningful discipline, visible enforcement, and strong controls can increase the perceived cost of committing fraud. The current CFE Fraud Prevention and Deterrence section examines why people commit fraud and how organizations can prevent and deter financial misconduct.<\/span><\/p>\n

    Question 322. What does routine activities theory require for crime opportunity<\/b><\/p>\n

      \n
    1. <\/b> Only financial pressure<\/span><\/li>\n
    2. <\/b> Only an unethical culture<\/span><\/li>\n
    3. <\/b> Only management override<\/span><\/li>\n
    4. <\/b> A suitable target and lack of effective guardianship<\/span><\/li>\n<\/ol>\n

      Correct Answer: 4. A suitable target and lack of effective guardianship<\/b><\/p>\n

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

      Routine activities theory focuses on the conditions that make misconduct possible. A potential offender, a suitable target, and insufficient guardianship can combine to create an opportunity for wrongdoing. In an organization, effective guardianship can include supervision, approvals, access restrictions, monitoring, reconciliations, and independent review. Fraud prevention therefore includes changing the environment so valuable assets or systems are not easily accessible without oversight. The CFE Fraud Prevention and Deterrence section includes theories explaining financial crime because understanding criminal opportunity can help organizations design stronger deterrence and prevention measures.<\/span><\/p>\n

      Question 323. What does differential reinforcement theory emphasize<\/b><\/p>\n

        \n
      1. <\/b> Behavior can be influenced by rewards and consequences<\/span><\/li>\n
      2. <\/b> All fraud is caused by accounting errors<\/span><\/li>\n
      3. <\/b> Only external controls matter<\/span><\/li>\n
      4. <\/b> Employees cannot learn misconduct<\/span><\/li>\n<\/ol>\n

        Correct Answer: 1. Behavior can be influenced by rewards and consequences<\/b><\/p>\n

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

        Differential reinforcement theory proposes that behavior can be strengthened or weakened depending on the rewards and consequences associated with it. In an organization, employees who observe misconduct being rewarded or ignored may become more likely to view similar behavior as acceptable. Consistent discipline and visible recognition of ethical conduct can therefore influence workplace behavior. Fraud prevention programs should examine not only written policies but also what the organization actually rewards, tolerates, and punishes. The current CFE exam includes theories and research related to financial crime within Fraud Prevention and Deterrence.<\/span><\/p>\n

        Question 324. Which approach can strengthen deterrence most directly<\/b><\/p>\n

          \n
        1. <\/b> Removing monitoring<\/span><\/li>\n
        2. <\/b> Hiding disciplinary actions<\/span><\/li>\n
        3. <\/b> Increasing the perceived likelihood of detection<\/span><\/li>\n
        4. <\/b> Eliminating reporting channels<\/span><\/li>\n<\/ol>\n

          Correct Answer: 3. Increasing the perceived likelihood of detection<\/b><\/p>\n

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

          Deterrence becomes stronger when potential offenders believe misconduct is likely to be detected and followed by meaningful consequences. Controls such as monitoring, surprise reviews, reporting mechanisms, analytics, and independent oversight can increase this perception. Deterrence does not require publicizing confidential case details, but employees should understand that controls operate and violations are taken seriously. The ACFE Fraud Risk Management Guide emphasizes prevention and detection control activities as essential elements of a comprehensive fraud risk management program. Effective deterrence works alongside governance, risk assessment, investigation, and monitoring.<\/span><\/p>\n

          Question 325. What is the purpose of fraud risk governance policies<\/b><\/p>\n

            \n
          1. <\/b> Define authority and accountability for fraud risk<\/span><\/li>\n
          2. <\/b> Replace all investigations<\/span><\/li>\n
          3. <\/b> Eliminate management involvement<\/span><\/li>\n
          4. <\/b> Set customer prices<\/span><\/li>\n<\/ol>\n

            Correct Answer: 1. Define authority and accountability for fraud risk<\/b><\/p>\n

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

            Fraud risk governance policies clarify who oversees fraud risk, who owns specific responsibilities, how significant issues are escalated, and how the program connects with corporate governance. Without clear accountability, important fraud risks can remain unmanaged because departments assume another function is responsible. Strong governance also supports consistent decision making and board oversight. The ACFE and COSO Fraud Risk Management Guide identifies establishment of fraud risk governance policies as the first major component of a comprehensive fraud risk management program.<\/span><\/p>\n

            Question 326. What should a fraud risk assessment consider about emerging technology<\/b><\/p>\n

              \n
            1. <\/b> Technology eliminates fraud risk<\/span><\/li>\n
            2. <\/b> Only accounting systems matter<\/span><\/li>\n
            3. <\/b> New technology should never be used<\/span><\/li>\n
            4. <\/b> New technology can create new fraud opportunities<\/span><\/li>\n<\/ol>\n

              Correct Answer: 4. New technology can create new fraud opportunities<\/b><\/p>\n

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

              New technology can improve controls but can also introduce new fraud risks. Automated systems, artificial intelligence, remote access, digital payments, and new data flows can create vulnerabilities that older risk assessments did not consider. Management should therefore reassess fraud scenarios when technology changes significantly. The revised CFE Exam launched in June 2026 specifically reflects changes in the modern fraud environment and is designed around current professional competencies. Fraud risk assessment should remain dynamic so controls continue to address the organization’s actual exposure.<\/span><\/p>\n

              Question 327. What should be done with a fraud risk that has no control owner<\/b><\/p>\n

                \n
              1. <\/b> Delete the risk<\/span><\/li>\n
              2. <\/b> Assign clear responsibility<\/span><\/li>\n
              3. <\/b> Ignore it until an incident occurs<\/span><\/li>\n
              4. <\/b> Transfer it automatically to auditors<\/span><\/li>\n<\/ol>\n

                Correct Answer: 2. Assign clear responsibility<\/b><\/p>\n

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

                A significant fraud risk should have clear responsibility for the controls and actions used to manage it. Without an accountable owner, control failures and remediation items can remain unresolved. Management should identify who has authority over the affected process and who is responsible for implementing and monitoring the response. Auditors may assess the control but should not normally own operational fraud risk. The Fraud Risk Management Guide emphasizes governance, risk assessment, control activities, investigations, and monitoring as coordinated elements that require clearly assigned responsibilities.<\/span><\/p>\n

                Question 328. What is the purpose of a fraud risk assessment workshop facilitator<\/b><\/p>\n

                  \n
                1. <\/b> Approve every risk rating alone<\/span><\/li>\n
                2. <\/b> Replace management judgment<\/span><\/li>\n
                3. <\/b> Guide structured discussion and challenge assumptions<\/span><\/li>\n
                4. <\/b> Investigate every participant<\/span><\/li>\n<\/ol>\n

                  Correct Answer: 3. Guide structured discussion and challenge assumptions<\/b><\/p>\n

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

                  A facilitator helps keep a fraud risk assessment workshop focused, balanced, and structured. The facilitator can encourage participants to consider realistic schemes, challenge assumptions, discuss control weaknesses, and ensure that dominant personalities do not prevent others from contributing. The facilitator should not simply impose personal conclusions on the group. Fraud risk assessments benefit from diverse perspectives and disciplined discussion. ACFE resources provide fraud risk tools and templates intended to help organizations identify vulnerabilities and develop appropriate fraud risk responses.<\/span><\/p>\n

                  Question 329. What is the purpose of monitoring a fraud risk management program<\/b><\/p>\n

                    \n
                  1. <\/b> Set employee bonuses<\/span><\/li>\n
                  2. <\/b> Replace governance<\/span><\/li>\n
                  3. <\/b> Eliminate investigations<\/span><\/li>\n
                  4. <\/b> Determine whether the program remains effective<\/span><\/li>\n<\/ol>\n

                    Correct Answer: 4. Determine whether the program remains effective<\/b><\/p>\n

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

                    Monitoring evaluates whether fraud risk management processes and controls continue to operate effectively as business conditions change. Organizations should review control performance, remediation status, incident trends, reporting data, emerging risks, and other relevant indicators. A program that is never evaluated can become outdated even if it was well designed originally. The ACFE and COSO Fraud Risk Management Guide specifically identifies monitoring and evaluating the effectiveness of the fraud risk management program as one of its five central principles.<\/span><\/p>\n

                    Question 330. What should be done after a significant fraud investigation ends<\/b><\/p>\n

                      \n
                    1. <\/b> Review lessons learned and control implications<\/span><\/li>\n
                    2. <\/b> Destroy all investigation records<\/span><\/li>\n
                    3. <\/b> Stop fraud risk monitoring<\/span><\/li>\n
                    4. <\/b> Assume the issue cannot recur<\/span><\/li>\n<\/ol>\n

                      Correct Answer: 1. Review lessons learned and control implications<\/b><\/p>\n

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

                      A completed investigation can reveal weaknesses in controls, governance, culture, supervision, or third party oversight. Organizations should use these findings to determine why the fraud was possible and whether similar exposure exists elsewhere. Remediation might include process changes, stronger controls, training, disciplinary action, or updates to the fraud risk assessment. The Fraud Risk Management Guide includes fraud investigations as part of a comprehensive fraud risk management program because incident response should feed information back into prevention and monitoring efforts.<\/span><\/p>\n

                      Question 331. What is the primary benefit of an independent hotline provider<\/b><\/p>\n

                        \n
                      1. <\/b> It eliminates all false reports<\/span><\/li>\n
                      2. <\/b> It can strengthen perceived confidentiality and independence<\/span><\/li>\n
                      3. <\/b> It replaces management responsibility<\/span><\/li>\n
                      4. <\/b> It guarantees every allegation is valid<\/span><\/li>\n<\/ol>\n

                        Correct Answer: 3. It can strengthen perceived confidentiality and independence<\/b><\/p>\n

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

                        An independent hotline provider can increase employee confidence that reports will be handled outside ordinary management channels. This can be especially useful when employees fear retaliation or believe managers might suppress sensitive allegations. Independence does not guarantee that every allegation is accurate, and management still needs procedures for evaluation, escalation, investigation, and remediation. The ACFE provides fraud prevention tools and emphasizes reporting mechanisms as part of broader anti fraud programs. Reporting channels work best when employees trust them and understand how concerns will be handled.<\/span><\/p>\n

                        Question 332. What is the best use of culture survey results in fraud prevention<\/b><\/p>\n

                          \n
                        1. <\/b> Determine customer prices<\/span><\/li>\n
                        2. <\/b> Identify weaknesses in ethical climate and reporting confidence<\/span><\/li>\n
                        3. <\/b> Replace all controls<\/span><\/li>\n
                        4. <\/b> Prove fraud occurred<\/span><\/li>\n<\/ol>\n

                          Correct Answer: 2. Identify weaknesses in ethical climate and reporting confidence<\/b><\/p>\n

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

                          Culture surveys can reveal whether employees believe management acts ethically, whether they feel pressure to compromise standards, and whether they trust reporting channels. These results can expose prevention weaknesses that transaction controls alone may not reveal. A survey cannot prove that fraud is occurring, but it can identify areas where culture or leadership behavior increases fraud risk. Fraud Prevention and Deterrence covers corporate governance, prevention programs, risk management, and ethical considerations, all of which can be informed by an understanding of organizational culture.<\/span><\/p>\n

                          Question 333. What should management do when incentives reward only short term financial results<\/b><\/p>\n

                            \n
                          1. <\/b> Evaluate whether the incentives create misconduct pressure<\/span><\/li>\n
                          2. <\/b> Ignore behavioral effects<\/span><\/li>\n
                          3. <\/b> Remove all ethics training<\/span><\/li>\n
                          4. <\/b> Eliminate board oversight<\/span><\/li>\n<\/ol>\n

                            Correct Answer: 1. Evaluate whether the incentives create misconduct pressure<\/b><\/p>\n

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

                            Compensation and performance systems can unintentionally encourage fraud when employees believe results matter more than how those results are achieved. Management should review whether incentives create excessive pressure, encourage manipulation, or discourage accurate reporting. Balanced performance measures, ethical expectations, clawback provisions where appropriate, and independent review can reduce these concerns. Understanding why people commit fraud is a core purpose of the Fraud Prevention and Deterrence section, so organizational incentives should be considered alongside internal controls and governance.<\/span><\/p>\n

                            Question 334. What should happen when fraud monitoring creates too many false alerts<\/b><\/p>\n

                              \n
                            1. <\/b> Ignore every alert<\/span><\/li>\n
                            2. <\/b> Stop all monitoring<\/span><\/li>\n
                            3. <\/b> Increase alerts without review<\/span><\/li>\n
                            4. <\/b> Refine the rules and thresholds<\/span><\/li>\n<\/ol>\n

                              Correct Answer: 4. Refine the rules and thresholds<\/b><\/p>\n

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

                              Excessive false alerts can overwhelm reviewers and cause important warnings to receive insufficient attention. Management should evaluate whether monitoring rules, thresholds, data quality, or risk assumptions need adjustment. The goal is not to eliminate every false positive because overly narrow rules could miss genuine problems. Instead, analytics should balance sensitivity with practical review capacity. ACFE fraud risk resources emphasize data driven tools and ongoing evaluation of fraud risk programs. Monitoring works best when alert logic remains aligned with current fraud scenarios and organizational risk.<\/span><\/p>\n

                              Question 335. What does control self assessment primarily involve<\/b><\/p>\n

                                \n
                              1. <\/b> External auditors replacing management<\/span><\/li>\n
                              2. <\/b> Process owners evaluating their own controls and risks<\/span><\/li>\n
                              3. <\/b> Customers rating employees<\/span><\/li>\n
                              4. <\/b> Regulators approving transactions<\/span><\/li>\n<\/ol>\n

                                Correct Answer: 2. Process owners evaluating their own controls and risks<\/b><\/p>\n

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

                                Control self assessment involves process owners and employees evaluating risks and the controls operating within their areas. Because these individuals understand daily processes, they can identify weaknesses that outsiders might miss. However, self assessment should not be the only source of assurance because process owners may overlook or minimize problems. Independent testing and monitoring can complement it. Fraud risk management benefits when operational knowledge and independent challenge are combined. The CFE exam includes management responsibility for controls and structured fraud risk assessment within Fraud Prevention and Deterrence.<\/span><\/p>\n

                                Question 336. What should an organization do when one control depends on management honesty<\/b><\/p>\n

                                  \n
                                1. <\/b> Assume the control is sufficient<\/span><\/li>\n
                                2. <\/b> Remove all oversight<\/span><\/li>\n
                                3. <\/b> Add independent verification where appropriate<\/span><\/li>\n
                                4. <\/b> Eliminate documentation<\/span><\/li>\n<\/ol>\n

                                  Correct Answer: 3. Add independent verification where appropriate<\/b><\/p>\n

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

                                  A control that relies entirely on the honesty of the person whose activity it is intended to control can be weak. Where management override or conflict is possible, independent verification can reduce risk. This might include audit committee review, independent reconciliation, system monitoring, secondary approval, or another control outside the individual’s influence. Strong fraud risk governance recognizes that even senior personnel can create risk. The Fraud Risk Management Guide emphasizes governance policies, prevention and detection controls, and monitoring of program effectiveness.<\/span><\/p>\n

                                  Question 337. What should a fraud prevention program do with anonymous reports<\/b><\/p>\n

                                    \n
                                  1. <\/b> Discard them automatically<\/span><\/li>\n
                                  2. <\/b> Publish them publicly<\/span><\/li>\n
                                  3. <\/b> Treat them as proven facts<\/span><\/li>\n
                                  4. <\/b> Evaluate them based on available information and risk<\/span><\/li>\n<\/ol>\n

                                    Correct Answer: 4. Evaluate them based on available information and risk<\/b><\/p>\n

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

                                    Anonymous reports can contain valuable information even when the reporter’s identity is unknown. The organization should evaluate the allegation based on specificity, credibility, available evidence, potential impact, and applicable procedures. Anonymous status alone should not cause a report to be dismissed or automatically accepted as true. Effective reporting programs establish consistent intake, triage, escalation, and investigation processes. The Fraud Prevention and Deterrence section includes building effective fraud prevention programs and ethical considerations, both of which support fair handling of allegations.<\/span><\/p>\n

                                    Question 338. What is the best reason to separate investigation oversight from the accused manager<\/b><\/p>\n

                                      \n
                                    1. <\/b> Preserve independence and reduce interference risk<\/span><\/li>\n
                                    2. <\/b> Increase management override<\/span><\/li>\n
                                    3. <\/b> Delay the investigation<\/span><\/li>\n
                                    4. <\/b> Eliminate confidentiality<\/span><\/li>\n<\/ol>\n

                                      Correct Answer: 2. Preserve independence and reduce interference risk<\/b><\/p>\n

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

                                      When a manager is the subject of an allegation, allowing that person to control the investigation can create conflicts of interest and opportunities to influence evidence or witnesses. Oversight should instead be assigned to an appropriate independent authority such as legal counsel, compliance leadership, internal audit where appropriate, or the audit committee. Fraud risk governance and investigation processes should account for sensitive allegations involving senior personnel. The Fraud Risk Management Guide specifically identifies governance and investigations as coordinated elements of an effective fraud risk management program.<\/span><\/p>\n

                                      Question 339. What should a CFE do when management asks for an unsupported conclusion<\/b><\/p>\n

                                        \n
                                      1. <\/b> Refuse to state a conclusion without sufficient evidence<\/span><\/li>\n
                                      2. <\/b> Change findings to satisfy management<\/span><\/li>\n
                                      3. <\/b> Ignore professional standards<\/span><\/li>\n
                                      4. <\/b> Remove contrary evidence<\/span><\/li>\n<\/ol>\n

                                        Correct Answer: 1. Refuse to state a conclusion without sufficient evidence<\/b><\/p>\n

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

                                        A CFE should base professional conclusions on sufficient and appropriate evidence rather than pressure from management or a client. Agreeing to an unsupported conclusion would impair objectivity and professional integrity. The examiner should explain the evidential limitations and communicate what the available facts do and do not support. Ethical fraud examination requires independence of judgment, competent work, and accurate reporting. The current Fraud Prevention and Deterrence section includes ethical considerations as a core area of CFE knowledge.<\/span><\/p>\n

                                        Question 340. What should be the final objective of a mature fraud risk management program<\/b><\/p>\n

                                          \n
                                        1. <\/b> Create the largest number of controls<\/span><\/li>\n
                                        2. <\/b> Eliminate every possible risk<\/span><\/li>\n
                                        3. <\/b> Manage fraud risk through governance assessment controls response and monitoring<\/span><\/li>\n
                                        4. <\/b> Transfer all fraud responsibility to auditors<\/span><\/li>\n<\/ol>\n

                                          Correct Answer: 3. Manage fraud risk through governance assessment controls response and monitoring<\/b><\/p>\n

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

                                          A mature fraud risk management program uses an integrated process rather than relying on one control or department. The ACFE and COSO Fraud Risk Management Guide identifies five central elements: governance policies, fraud risk assessment, prevention and detection controls, fraud investigations, and monitoring of program effectiveness. Together these elements help organizations identify changing fraud exposure, respond appropriately, and learn from incidents. The objective is not to eliminate every possible risk, which is rarely practical, but to manage fraud risk systematically and keep residual exposure within acceptable limits.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

                                          View Full ACFE CFE – Fraud Prevention Exam Dumps and Practice Test Dumps. Question 321. What does rational choice theory suggest about fraud Fraud is always accidental Offenders may weigh expected benefits against risks Fraud occurs only in large companies Controls never affect behavior Correct Answer: 2. Offenders may weigh expected benefits against risks Explanation: […]<\/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\/23152"}],"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=23152"}],"version-history":[{"count":1,"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/posts\/23152\/revisions"}],"predecessor-version":[{"id":23153,"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/posts\/23152\/revisions\/23153"}],"wp:attachment":[{"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/media?parent=23152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/categories?post=23152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.examlabs.com\/certification\/wp-json\/wp\/v2\/tags?post=23152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}