ACFE Updated CFE-Fraud-Prevention-and-Deterrence Exam Questions and Answers by owais

 ACFE Code of Professional Ethics:

Article II prohibits all illegal and unethical conduct, with no exceptions for unknowing violations of the law. CFEs are expected to maintain a high standard of professional integrity and responsibility.

 Why B is Correct:

Ignorance of the law is not an acceptable defense under the ACFE Code of Ethics. Professionals must ensure they understand and comply with applicable laws.

 References:

ACFE Code of Professional Ethics​​.

 Definition of Corporate Governance:

Corporate governance establishes the framework for decision-making and accountability within an organization. It includes roles, rights, and responsibilities of stakeholders such as the board, management, and shareholders.

 Why D is Correct:

The governance structure formalizes the distribution of roles and ensures clarity in accountability and oversight.

 Why Other Options are Incorrect:

A: Fraud risk management supports governance but is not its foundation.

B: Governance encompasses more than financial reporting accuracy.

C: Governance practices are essential even when owners are setting strategy​​.

Key Elements of an Ethics Program:

An effective ethics program involves assessing existing issues, such as ethical leadership gaps, and designing policies and practices to address them.

Analysis of Other Options:

A. Restricted access: Ethics policies should be accessible to external parties, including stakeholders, to enhance transparency.

C. Written policy alone: A written policy is insufficient without ongoing communication, training, and leadership support.

D. All of the above: Incorrect because options A and C are not true.

Conclusion:Considering existing ethical leadership issues is critical when designing an effective ethics program.

References:ACFE materials on ethics program design and implementation​​.

Collusion between contractors is an example of external fraud risk because it involves external parties conspiring to defraud the organization. The other options describe internal fraud risks, such as actions committed by employees within the organization.

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