CFE-Fraud-Prevention-and-Deterrence Exam Dumps - Certified Fraud Examiner - Fraud Prevention and Deterrence Exam

Social Control Theory Overview:

This theory posits that individuals consider social and personal relationships when deciding whether to commit a crime. They reflect on the potential consequences of their actions on their relationships and social standing.

Application to the Scenario:

The question of "What will my spouse think?" aligns directly with social control theory, as it involves weighing personal consequences within a social context.

Analysis of Other Options:

B. Operant theory:Focuses on behavior modification through rewards and punishments.

C. Cognitive theory:Centers on thought processes and decision-making patterns.

D. Behavioral theory:Examines the external influences on behavior, not personal social relationships.

Conclusion:Social control theory best explains the scenario.

Best Practices for Protecting Whistleblowers:

Ensuring a safe environment for whistleblowers is critical to fostering an ethical organizational culture.

Establishing formal consequences for retaliation protects whistleblowers and promotes trust.

Analysis of Options:

A. Rules only for lower-level employees:Whistleblower protections must apply to all employees, regardless of rank.

B. Listing every type of misconduct:Comprehensive policies are good, but they do not need to enumerate all past misconduct.

C. Internal communication only:Communicating whistleblower procedures to external stakeholders (e.g., regulators) can be critical.

D. Formal consequences for retaliation:This is essential to discourage retaliatory actions and ensure fairness.

Conclusion:Establishing formal consequences for retaliation is the most accurate and aligned with best practices.

ï‚· Principle Overview:

Responsibility pertains to the duty of an organization to act in the best interest of society, ensuring sustainable and ethical practices that benefit all stakeholders, including employees, customers, and the environment.

ï‚· Corporate Governance Definition:

Corporate governance frameworks emphasize corporate responsibility as a key pillar for maintaining societal trust and long-term value creation.

ï‚· Why Responsibility is Correct:

While transparency, fairness, and accountability are essential, responsibility uniquely emphasizes societal interests and ethical conduct​​.

The ACFE has found that terminating the employee involved in fraud is the most common internal response to substantiated cases. While many fraud cases are handled internally without being referred to law enforcement, this is often due to concerns such as reputational damage or cost considerations rather than a lack of evidence.

ï‚· Research Findings by Silk and Vogel:

Their research highlights that business leaders often justify non-compliance with regulations by arguing that adhering to such rules significantly increases operational costs and reduces profitability.

ï‚· Rationalization in Legal Violations:

This rationalization is consistent with the fraud triangle concept, where rationalization serves as a justification for unethical or illegal actions.

ï‚· Why A is Correct:

This accurately represents a common justification for regulatory non-compliance as documented in fraud and compliance research​​.

Responsibility for Anti-Fraud Program Effectiveness:

Management holds ultimate responsibility for designing, implementing, and maintaining an effective anti-fraud program.

Internal and external auditors, as well as compliance functions, provide oversight and recommendations but are not directly responsible for the program's effectiveness.

Conclusion:Management is ultimately accountable for ensuring the success of the anti-fraud program.