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.
Correct Answer: A
* Understanding the ACFE Code of Professional Ethics:The ACFE Code of Professional Ethics requires Certified Fraud Examiners to demonstrate competence and due care in their professional services. Specifically: * Rule 2 states that CFEs must "perform all professional engagements with due diligence." * Rule 4 emphasizes that CFEs must "avoid conduct that discredits the profession or the Association." * Competence and Due Care: * Benjamin, despite his attendance at a seminar on money laundering, lacks the requisite expertise or experience in investigating complex money laundering cases. Accepting an engagement of this nature without possessing adequate training, knowledge, or resources indicates a failure to exercise due care. * The Code emphasizes the importance of competence, meaning professionals must decline engagements that exceed their expertise unless they involve qualified individuals or teams. * Violation Assessment: * By choosing to conduct the investigation alone, Benjamin disregards the ethical requirement to ensure competence and quality in professional work. This likely jeopardizes the investigation's integrity and results. * This conduct could lead to suboptimal outcomes, legal liabilities, and reputational harm, which discredit the profession, violating the ACFE ethical framework. * Conclusion:Benjamin's decision is a breach of the ACFE Code of Professional Ethics because he failed to ensure adequate preparation, skills, and resources for the engagement.
Question 102
In the context of a fraud examination, integrity requires all of the following EXCEPT:
Correct Answer: A
Question 103
Which of the following options is an effective way for an organization to reinforce an anti-fraud culture through performance measurement and management?
Correct Answer: C
An organization reinforces an anti-fraud culture when it clearly defines responsibilities, authority, reporting lines, and performance expectations. Formal job descriptions help employees understand what they are responsible for, what conduct is expected, and how their work fits within the control environment. This reduces ambiguity that fraudsters can exploit and supports accountability. Option A is incorrect because ethics-based metrics should be included, not removed, from performance evaluations. Option B is insufficient because management must help identify training needs and correct performance deficiencies. Option D is dangerous because focusing only on productivity and profit can create pressure to ignore ethics or manipulate results. Therefore, providing formal job descriptions is an effective way to reinforce an anti-fraud culture through performance management.
Question 104
Employee anti-fraud education should:
Correct Answer: C
Question 105
Which of the following statements is MOST ACCURATE regarding an effective system of anti-fraud controls?
Correct Answer: A
The manual states that no system of internal controls can fully eliminate the risk of fraud. Even so, well- designed and effective internal controls can greatly reduce an organization's vulnerability to fraud by lowering opportunities and increasing the perception of detection. This means an anti-fraud control system is highly valuable, but it is not absolute. The manual does not say that preventive controls should always be prioritized over detective controls or vice versa; rather, both play important and complementary roles. It also specifically says effective controls increase, not decrease, the perception that misconduct will be detected, which is a key deterrent to potential fraudsters. Therefore, the most accurate statement is that an effective system of anti-fraud controls reduces risk but does not completely eliminate it.
