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

Comprehensive and Detailed in Depth Explanation:

Fraud risk assessments can be effectively conducted by internal personnel or external consultants. The key is that they must be conducted objectively and with due professional care. There is no requirement that they be conducted only externally (eliminating A), nor should biases about the improbability of fraud influence the assessment scope (eliminating B). Management involvement can be helpful when balanced appropriately—it should not be unduly limited (eliminating D).

Organizational crime is committed by an organization, such as a corporation or government entity, rather than merely by an individual acting for personal benefit. Price-fixing or agreeing with competitors to raise prices is typically an antitrust-type offense committed in the context of business operations and organizational objectives. The other options describe occupational fraud or asset misappropriation, where an employee abuses an occupational position to steal or misuse the employer’s property. A senior accountant misusing company funds, a manager arranging fraudulent returns, and an inventory manager stealing products are individual occupational offenses. A commercial director coordinating price increases with industry competitors represents a business-level violation that benefits or is carried out through the organization. Therefore, option D is the correct answer.

 Statistics on Fraud Prosecution:

Research indicates that many organizations prefer to handle fraud cases internally rather than involving law enforcement due to concerns over reputation, cost, and time.

 Why B is Correct:

Organizations often resolve fraud cases through internal disciplinary actions, such as termination or restitution, rather than pursuing criminal prosecution​​.

 Why Other Options are Incorrect:

While internal handling is common, other factors like fear of publicity and legal costs also influence the decision to avoid prosecution.