Free Access ACFE.CFE-Fraud-Prevention-and-Deterrence.v2025-11-07.q135 Practice Test (Page 26)

Question 121

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:

A.The economy's increased reliance on credit

B.The decrease in funds available from government assistance programs

C.The continued pressures of a culture that rewards affluence and success

D.The increased opportunity for wrongdoing as a result of advancing information technologies

Question 122

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?

A.Susannah should confront management with her audit findings and try to get a confession.

B.Susannah should Immediately report her findings to the secunties regulators

C.Susannah should report her findings to the audit committee of the board of directors.

D.Susannah should not disclose her findings to any other parties due to client confidentiality.

Question 123

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?

A.A mandatory independent compensation committee

B.Shareholder oversight of internal controls

C.A written charter for management

D.Adequate audit committee resources and authority

Question 124

According to Silk and Vogel's research, which of the following is one of the ways that businesses rationalize illegal conduct?

A.Government regulations are justified because the additional costs of regulations and bureaucratic procedures increase government profits.

B.Violations are caused by innocent errors in judgment rather than economic necessity.

C.Government regulation is unnecessary because the matters being regulated are unimportant.

D.Corporate violations that involve large sums of money are often spread among so many organizations that each gains very little individually.

Question 125

During an external audit of an organization's financial statements, Saskia, the external auditor, uncovers significant internal control deficiencies at the organization. She believes these deficiencies could result in a material misstatement of the financial statements. Which of the following should Saskia do regarding these findings?

A.Saskia should communicate the deficiencies in writing to those charged with governance.

B.Saskia should suspend the current audit engagement and begin a new audit focused on the internal control deficiencies.

C.Saskia should provide a written communication about her findings to the relevant regulatory agencies.

D.Saskia should withdraw from the audit engagement immediately and issue a disclaimer on any prior work performed.

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Question 121

Question 122

Question 123

Question 124

Question 125

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