Section 3 (Qs) - Fraud Risk Management

Front 1

Which of the following is among the audit committe's responsibilities for fraud risk management?

A. Performing and regularly updating the fraud risk assessment.

B. Receiving regular reports on the status of reported or alleged fraud.

C. Monitoring and proactively improving fraud risk management program.

D. All of these answers are correct.

Back 1

Receiving regular reports on the status of reported or alleged fraud.

Front 2

To convey their dedication to the fraud risk management program, the board of directors and Senior Management should provide a formal statement of commitment that:

A. Preventing fraud.

B. Detecting fraud.

C. Responding to identified fraud.

D. All of these answers are correct.

Back 2

All of these answers are correct

Front 3

Which of the following statements is true in regard to an organization's fraud risk management program?

A. There should be measures in place to address failures in the design or operation of anti-fraud controls, as well as fraud occurrences.

B. Formal sanctions for intentional non-compliance must be well-publicized and carried out in a consistent and firm manner.

C. A specific team or individual should be designated as responsible for monitoring compliance and handling suspected instances of non-compliance.

D. All of these answers are correct.

Back 3

All of these answers are correct

Front 4

Which of the following is among the board of directors responsibilities pertaining to fraud risk management?

A. Overseeing the organization's fraud risk management activities.

B. Raising awareness of the risks of fraud throughout the organization.

C. Setting realistic expectations of management to enforce anti-fraud culture.

D. All of these answers are correct.

Back 4

All of these answers are correct

Front 5

Of the following parties, who is responsible for developing a strategy to assess and manage fraud risks that aligns with the organization's risk appetite and strategic plans?

A. The shareholders.

B. The legal department.

C. The internal audit Department.

D. The board of directors.

Back 5

The board of directors

Front 6

Of the following parties, who is responsible for the oversight of the organization's financial, accounting, and audit matters?

A. The internal auditors.

B. The external auditors.

C. The audit committee.

D. The CFO.

Back 6

The audit committee

Front 7

The board of directors hold primary responsibility for Designing, implementing, monitoring, and improving the fraud risk management program.

Back 7

False

Front 8

Risk management includes which of the following activities with regard to the risks that threaten an organization?

A. Treatment.

B. Monitoring.

C. Identification.

D. All of these answers are correct.

Back 8

All of these answers are correct

Front 9

A fraud risk management program must include mechanisms specifically designed to monitor, identify, and address breaches in compliance.

Back 9

True

Front 10

Management must assign a quantitative measure to its risk appetite so they can accurately measure the fraud risk management programs effectiveness.

Back 10

False

Front 11

Management at Blue Sky Inc. has decided to implement a formal risk management program and is using a risk management framework is a starting point. In developing the program, management should tailor the framework to the organization's:

A. Financial condition.

B. Culture.

C. Regulatory environment.

D. All of these answers are correct.

Back 11

All of these answers are correct

Front 12

According to the Joint IIA, AICPA, and ACFE publication Managing the Business Risk of Fraud: A Practical Guide, who has responsibility for dealing with fraud risk?

A. Internal audit.

B. Executive management.

C. Personnel at all levels of the organization.

D. The board of directors.

Back 12

Personnel at all levels of the organization

Front 13

According to managing the business risk of Fraud, and organizations anti-fraud policy should include consequences for individuals who condone fraudulent activity.

Back 13

True

Front 14

An organization's fraud risk management program should include which of the following components?

A. Whistleblower protection policies.

B. Quality assurance activities.

C. A way to disclose conflicts of interest.

D. All of these answers are correct.

Back 14

All of these answers are correct

Front 15

In defining the objectives of the fraud risk management program, management can choose to express risk appetite out of quantitatively or qualitatively.

Back 15

True

Front 16

According to COSO, _____ _____ _____ is a process that is designed to identify potential events that may affect the entity and manage risk and be within its risk appetite to provide reasonable Assurance regarding the achievement of the entities objectives.

A. Internal control.

B. Corporate governance.

C. Enterprise risk management.

D. Fraud prevention.

Back 16

Enterprise risk management

Front 17

As part of an organization's fraud risk management program, employees at all levels should:

A. Understand how non-compliance might create an opportunity for fraud to occur.

B. Cooperate in investigations into suspected or alleged fraud incidents.

C. Provide input into the design and implementation of fraud control activities when requested by management.

D. All of these answers are correct.

Back 17

All of these answers are correct

Front 18

An organization's fraud risk management team should be contained within one Department to ensure proper delegation, coverage, and oversight of the teams roles and responsibilities.

Back 18

False

Front 19

Fraud risk management programs should focus on:

A. Preventing fraud

B. Detecting fraud

C. Responding to identified fraud

D. All of these answers are correct

Back 19

All of these answers are correct

Front 20

Fraud risk management program should include the formal procedures management takes in response to a fraud, such as punishing the perpetrator, remediating the control weaknesses that allowed to fraud to occur, and rebuilding stakeholders confidence in the organization.

Back 20

True

Front 21

Which of the following is true regarding the process of defining the objective of the fraud risk management program?

A. Management must balance the investment in anti-fraud controls with the benefit of those controls and the amount of risk it is willing to accept.

B. Management should examine previous fraud occurrences to determine how the ideal fraud risk management program would have prevented them.

C. Management should Express risk appetite in a manner that is appropriate for and unique to the organization's culture and operations.

D. All of these answers are correct.

Back 21

All of these answers are correct

Front 22

Which of the following is not one of the components of coso's Enterprise risk management - integrated framework?

A. Monitoring

B. Internal Environment

C. Corporate Compliance

D. Risk Assessment

Back 22

Corporate compliance

Front 23

By law, all organizations must have an affirmation process as part of their fraud risk management program.

Back 23

False

Front 24

Risk management involves weighing an organization's strategic, operational, reporting, and compliance objectives against how much risk management is willing to accept.

Back 24

True