Fraud Risk Assessment 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 Risk Assessment flashcards as text
Which of the following is the primary purpose of benchmarking during a fraud risk assessment?
Answer: To compare an organization's fraud controls against peer organizations or best practices
Benchmarking in fraud risk assessment involves comparing an organization's controls and risk posture against industry peers or established best practices to identify gaps.
An organization's fraud risk assessment reveals a high-likelihood, low-impact risk. The most appropriate management response is typically to:
Answer: Implement cost-effective controls to reduce likelihood
High-likelihood, low-impact risks are best addressed by implementing controls that reduce how often the fraud could occur.
Which of the following scenarios most clearly illustrates 'collusion risk' in a fraud risk assessment?
Answer: Two employees who agree to circumvent segregation of duties controls together
Collusion risk arises when two or more individuals work together to bypass controls that would prevent fraud by a single person.
In the context of fraud risk assessment, 'tone at the top' is evaluated primarily because it affects which fraud triangle element?
Answer: All three elements
A poor tone at the top can create pressure through unrealistic expectations, opportunities through weak oversight, and rationalization through modeling unethical behavior.
When using data analytics as part of a fraud risk assessment, what is the primary goal?
Answer: To identify anomalies and patterns that may indicate fraud risk exposure
Data analytics in fraud risk assessment is used to surface anomalies, outliers, and unusual patterns that signal areas of elevated fraud risk.
A company operates in an industry with high cash transaction volume. When conducting a fraud risk assessment, this environmental factor primarily elevates which category of fraud risk?
Answer: Asset misappropriation
High cash transaction volume significantly increases the risk of asset misappropriation, particularly cash theft and skimming schemes.
Which of the following is the MOST effective way to ensure that a fraud risk assessment remains current and relevant?
Answer: Updating the assessment periodically and whenever significant organizational changes occur
Fraud risk assessments should be refreshed on a regular schedule and triggered by major events like reorganizations, new products, or mergers.