Which of the following statements regarding the objectives of a fraud risk management program is TRUE?

• A.A fraud risk management program should include the formal procedures that management takes in response to a fraud, such as rebuilding stakeholders' confidence in the organization.
• B.A fraud risk management program should only focus on addressing fraud after it occurs.
• C.A fraud risk management program should incorporate policies and procedures designed to both prevent and detect fraud but should not address fraud responses.
• D.A fraud risk management program should prioritize activities that proactively identify and assess fraud risks over activities that detect fraud while it is occurring.

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According to International Organization for Standardization (ISO) 31000:2018, an effective and efficient risk management program contains all of the following principles EXCEPT:

• A.The program is structured and comprehensive.
• B.The program is based upon the best available information.
• C.The program is integrated into only high-risk organizational activities.
• D.The program is customized and proportionate to the organization's operations and objectives.

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Which of the following is one of the four recommendations made by the National Commission on Fraudulent Financial Reporting (the Treadway Commission) to reduce the probability of fraud in financial reports?

• A.Assign oversight of the hotline reporting program to company shareholders
• B.Have a mandatory independent finance committee
• C.Provide adequate resources and authority to the internal audit function
• D.Develop a written charter for the audit committee

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A company implements mandatory job rotation within its accounting department. What fraud risk benefit does this provide?

• A.It increases opportunities for concealment
• B.It discourages independent review
• C.It helps expose irregularities when duties change hands
• D.It eliminates all payroll fraud

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Which of the following is TRUE regarding government auditors' responsibilities to report evidence of potential fraud uncovered during an audit of a public-sector organization's financial statements?

• A.All government auditors maintain the same requirements for reporting evidence of potential fraud uncovered during a public-sector financial statement audit.
• B.Government auditors are legally prohibited from reporting evidence of potential fraud to any parties outside the organization being audited.
• C.Government auditors' reporting requirements pertaining to fraud are substantially the same as those for external auditors in the private sector.
• D.The requirements for government auditors to report evidence of potential fraud depend on the jurisdiction and the specific audit mandate.

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