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

 Definition of Professional Skepticism:

Professional skepticism requires maintaining a questioning mindset and critically assessing evidence throughout the fraud examination process.

 Why D is Correct:

Professional skepticism ensures that fraud examiners remain vigilant and rely on evidence to conclude whether fraud has occurred or not. It is dispelled only when sufficient evidence supports a clear conclusion.

 Why Other Options are Incorrect:

A:While skepticism is critical, it does not mean refusing to acknowledge credible evidence.

B:Assuming no fraud occurred contradicts the principle of skepticism.

C:Hypotheses should consider the nature of the assignment and available information​​.

According to the ISAs, auditors are required to communicate identified instances of fraud to those charged with governance of the organization. This ensures that the appropriate individuals within the organization are informed and can take necessary corrective actions. Reportingfindings to the media or confronting individuals directly is not considered an appropriate course of action.

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According to ISA 240, the auditor is required to communicate identified fraud involving management to those charged with governance.

“When fraud involving senior management is identified or suspected, the auditor shall communicate these findings directly to those charged with governance.”