Practice Test Geeks(ACFE) Association of Certified Fraud Examiners Practice Test
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Fraud Prevention & Deterrence Flashcards

7 cards from real ACFE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Fraud Prevention & Deterrence flashcards as text

  1. What is the main advantage of a confidential employee hotline compared to open-door reporting policies?

    Answer: It encourages reporting by reducing fear of retaliation

    Confidential hotlines encourage reporting because employees fear less retaliation when their identity is protected, leading to more tips being submitted.

  2. According to ACFE guidance, which department should ideally own and oversee the fraud risk management program?

    Answer: Board of directors and senior management

    The board of directors and senior management bear ultimate responsibility for the fraud risk management program, as governance starts at the top.

  3. Which scenario BEST illustrates the rationalization element of the fraud triangle?

    Answer: An employee believes the company underpays and they deserve more

    Rationalization occurs when a person justifies their fraudulent behavior with a belief such as 'I deserve this' or 'the company owes me.'

  4. Pre-employment screening is MOST effective at preventing fraud when it includes which element?

    Answer: Verification of references and credentials

    Verifying references and credentials helps confirm honesty, qualifications, and past behavior, which are strong indicators of future integrity.

  5. What is 'proactive data analysis' in the context of fraud deterrence?

    Answer: Continuously monitoring transactions to detect anomalies before losses escalate

    Proactive data analysis involves continuously reviewing transaction data for red flags and anomalies to catch potential fraud early, before significant losses occur.

  6. The ACFE's fraud prevention model emphasizes that deterrence is achieved primarily through:

    Answer: The perception that fraud will be detected and punished

    Deterrence works by making potential fraudsters believe they will be caught and face consequences, which requires both detection capability and consistent enforcement.

  7. Which of the following is an example of a preventive control in a fraud prevention framework?

    Answer: Requiring dual authorization for wire transfers

    Requiring dual authorization prevents unauthorized transfers from occurring at all, making it a preventive control rather than a detective one.