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

Steve Albrecht's Research on Fraud Motivation:

Personal factors like "living beyond their means" are commonly cited as a driver of fraudulent behavior.

Organizational factors, such as excessive trust in key employees, create opportunities for fraud by reducing oversight and enabling unethical behavior.

Analysis of Options:

A. High personal debt:This can be a motivator, but it is less common than "living beyond their means."

B. Revenge:Rarely a primary driver of fraud.

D. Desire for recognition:This may motivate some individuals, but it is not as prevalent as financial pressure and opportunity.

Conclusion:Option C reflects the most common personal and organizational factors motivating fraudsters.

Due Diligence for Large Orders on Credit:

Before extending credit, it is critical to assess the financial stability of the new customer to mitigate credit risk.

Examining net worth provides a direct measure of ABC’s ability to fulfill financial obligations.

Analysis of Other Options:

A. Corruption risk countries:Due diligence should be applied universally, not selectively.

B. No verification needed:Verification is essential, especially for new customers.

D. Same due diligence for all customers:While consistency is important, the level of due diligence may vary based on transaction specifics.

Conclusion:Examining ABC's net worth is a necessary step in the due diligence process.